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1.11 Rule 21.3 requires any information provided to an offeror to be provided on request to another offeror or bona fide potential offeror, so as to prevent the directors of an offeree company from being able to frustrate a competing offer by providing important information only to the ?preferred? offeror.

Rule 2.10(c) of the Takeover Code requires an announcement to be made promptly if the giver of an irrevocable commitment or a letter of intent becomes unable, or no longer intends, to comply with its terms, as follows: ?2.10 IRREVOCABLE COMMITMENTS AND LETTERS OF INTENT ? together with all relevant details.?.

In practice, this rule is applied to limit the number of live discussions or negotiations with third parties to six (groups of) persons; the rule is therefore sometimes referred to as the 'Rule of 6'.

The main purpose for the new takeover code is also to prevent hostile takeovers and at the same time, provide some more opportunities of exit to innocent shareholders who do not wish to be associated with a particular acquirer.

3. The board of an offeree company must act in the interests of the company as a whole and must not deny the holders of securities the opportunity to decide on the merits of the bid.

The code is designed principally to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment by an offeror.

Takeover is acquisition of substantial shares and control over the Target Company to expand or to diversify the business in an inorganic manner. Applicability of Takeover Code? Any person who directly or indirectly acquires or agrees to acquire shares or voting rights or control over the Target Company.