1. Terms of mandatory offer
(1) Subject to the provisions of this byelaw, a mandatory offer shall:
(a) comply with the conditions and requirements made under paragraph 5(1) of the Conversion and Related Arrangements Byelaw (No. 22 of 1996) for the time being in force and applicable to surrender arrangements or share swap arrangements, as may be modified from time to time for the purposes of this byelaw;
(b) in the case of an invitation to participate in a share swap arrangement, permit the persons to whom it is made to receive cash instead of the securities they would have received if they had participated in that share swap arrangement;
(c) be made to every other person who, at the time that offer is made is entitled to make a participation nomination and/or second nomination in respect of the syndicate to which that offer relates other than any person who:
(i) is an associate of the offeror; or
(ii) has been specified by the Council as a person who, by reason of the law of any foreign jurisdiction where he is resident or domiciled, should not receive such an offer;
(d) invite each of the persons referred to in sub-paragraph (1)(c) to participate in a share swap arrangement or surrender arrangement to the full extent of their entitlement to do so;
(e) state that the offeror (or, as the case may be, an associate or associates of the offeror) is or are entitled to participate in the syndicate for the next following year of account with a member’s syndicate premium limit or, as the case may be, member’s syndicate premium limits in aggregate not less than 75% of the syndicate allocated capacity of that syndicate for the next following year of account; and
(f) not be conditional as to acceptances.
2. Consideration for mandatory offer
(1) Subject to sub-paragraphs (2) and (2A), the value of the consideration payable by the offeror shall be not less than the higher of:
(a) the highest price paid during the relevant period by the offeror for, and
(b) the highest price paid during the relevant period by any associate of the offeror for the surrender of (or making of a participation nomination or a second nomination in respect of) the whole or part of a person’s prospective participation in relation to the syndicate.
(2) The Council may, if it thinks fit, on the written application of the offeror agree that the consideration should be of such lower value than that required by sub-paragraph (1) as the Council may specify.
(2A) Subject to sub-paragraph (2B), if during the relevant period the managing agent increases or reduces the syndicate allocated capacity of the syndicate for the succeeding year of account, the Council may, if it thinks fit, on its own volition or on the written application by or on behalf of any of the persons referred to in sub-paragraph 1(1)(c) of Schedule 2, require that the consideration should be of such higher value than that required by sub-paragraph (1) or agreed to under sub-paragraph (2) as the Council may specify.
(2B) Sub-paragraph (2A) shall not apply to any increase or reduction in the syndicate allocated capacity of the syndicate for the succeeding year of account before 16th June 1999;
(3) For the purposes of sub-paragraphs (1) and (2A), but subject to sub-paragraph (4), the ‘‘relevant period’’ is the period beginning twelve months before the date when the offeror (or, as the case may be, the associated group of which the offeror is a member) became entitled to participate in the syndicate for the next following year of account with a member’s syndicate premium limit or, as the case may be, member’s syndicate premium limits in aggregate not less than 75% of the syndicate allocated capacity of that syndicate and ending on the date when the mandatory offer ceases to be open for acceptance.
(4) If, pursuant to paragraph 3 of Schedule 2, the Council gave permission for the offeror to postpone the making of the mandatory offer from 1999 to 2000, the ‘‘relevant period’’ is the period beginning twelve months before the date when the offeror makes the mandatory offer and ending on the date when the mandatory offer ceases to be open for acceptance.
3. Late offers
Where compliance with the conditions and requirements made under paragraph 5(1) of the Conversion and Related Arrangements Byelaw (No. 22 of 1996) within the periods prescribed therein (as extended in accordance therewith) is impractical the Council may permit the making of the mandatory offer to be postponed until the following year.
Mandatory Offer Byelaw, Schedule 2