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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

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HM Revenue & Customs
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Schedule 3 SAYE option schemes: Requirements relating to share options: Exercise rights: Mergers and amalgamations

Takeovers may be effected in various ways including by General Offers or by Schemes of Arrangement. Depending on the arrangements used, exercise may be triggered by paragraph 37(2) or (4).

Schemes of arrangement covered by paragraph 37(4) can be very varied. The most common arrangement is the installation of a new holding company at the top of the group. Shareholders exchange their shares in the scheme company (the old holding company) for shares in the new holding company.

Other arrangements might be to:

  • put a new holding company at the head of what were formerly two companies or groups (although this may be more appropriately achieved by agreed bids by the new holding company for both targets), or
  • dissolve a company and transfer its assets, liabilities and business to another company, with the dissolved company’s shareholders receiving shares in the acquiring company in place of their holdings in the target.