New Rules on Takeover Fights Bow in Britain

New rules aimed at cleaning up corporate takeover battles and exposing share manipulation took effect in the London stock market Monday, a reaction to last year’s scandal over a takeover involving the brewing firm of Guinness PLC.

The rules drawn up by the Takeover Panel, a self-regulatory body of market participants, require all those who own more than 1% of companies involved in takeovers to identify themselves and disclose their dealings on a daily basis.

“There will be much greater exposure of who’s doing what. The aim is to shed sunlight on bids and avoid recurrences of things like the Guinness scandal,” said Peter Fraser, a senior Takeover Panel executive.

The previous threshold for disclosure was 5%, the same level at which the United States requires investors to disclose any holdings.

The new rules should prevent bid parties from hiding behind nominee names and prevent secret attempts to manipulate share prices, Fraser told Reuters.

The Department of Trade and Industry is investigating last year’s record $4.1-billion takeover by Guinness of whisky manufacturer Distillers.

Guinness has said it may have broken the law by bolstering the value of its own shares to increase their value in a merger offer for Distillers. Last month, the company fired its chairman.