UK schemes - prospectus mix and muddle

The exciting times for UK public M&A/ECM practitioners continue.

The FCA has decided in PMB 44 not to publish a Technical Note saying that mix-and-match schemes of arrangement always require a prospectus, which had been proposed in PMB 30 (August 2020). This was in part because all four of the respondents to the consultation disagreed with the FCA’s position – the respondents’ view (and mine) is that where securities are allotted under a scheme of arrangement, there is no “offer to the public”, so no UK public offer prospectus is required.

Although the FCA’s published view remains unchanged, they’ve decided to retain the status quo (i.e. most UK practitioners think one thing, the FCA thinks the opposite) for now, not least because of the potential upcoming changes to the UK prospectus regime (see our in-depth piece on that).

We do all agree on one thing, though, which is (to quote the FCA) “that the question of whether a prospectus is required is a question of law and ultimately is for the courts to decide”. So, to summarise that very sensible conclusion: if in doubt, speak to a friendly UK corporate lawyer.