Schedule 4 Company Share Option Plan (CSOP): Exchange of share options: Obtaining control by general offer
Paragraph 26(2)(a) permits rollover when a company (“the acquiring company”)
- obtains control of the company whose shares are used in the scheme, as a result of making a general offer to acquire:
- the whole of the issued ordinary share capital of that company, or
- all of the shares in that company which are of the same class as the scheme shares.
Paragraph 26(2)(a) does not apply if the acquiring company already has control of the company whose shares are being used in the scheme.
“Control” for this purpose has the meaning given in Section 719 ITEPA, that is the power to secure that the affairs of the company concerned are conducted in accordance with the wishes of that person.
There is no statutory definition of a “general offer”, so the phrase must be given its normal meaning - there must be an “offer” and it must be “general”. These features will not be satisfied if the acquiring company obtains control by acquiring holdings of shares privately from selected shareholders, possibly at different times and at different prices.
Paragraph 26(2)(a) does not apply if the takeover is of a company that controls the company whose shares are used in the scheme, rather than of the latter company itself.
Paragraph 26(2)(a) does not apply if the takeover is of the company that established the scheme (referred to in Paragraph 2(2) as the “scheme organiser”, although it need not actually grant the options itself), if the shares used in the scheme are those of another company.
It is possible to have more than one rollover, provided the scheme rules are suitably drafted to cater for a change in the company whose shares are scheme shares following each successive rollover.