The revised UK Takeover Code, which set out to increase protection for targets against protracted virtual bid periods, has seen almost a halving in the amount of time prospective businesses are targeted.

Findings from law firm Clifford Chance shows that the average virtual bid period stands at 38 days, half of what it was before the alterations.

In October 2011, modifications to the Takeover Code meant that targets had to identify all known potential bidders in announcement commencing offer period, while a potential bidder had to clarify its position within 28 days of identification (a put up or shut up situation).

Furthermore, disclosure in relation to offer-related advisory fees and expenses and increased disclosure of bid financing arrangements became necessary.

Clifford Chance also finds that 101 target companies entered offer periods in the year to date 18 September. Some 91 per cent of firm offers over the year were recommended at the time of announcement, with only four hostile bids in the period.

Lee Coney, public M&A partner at Clifford Chance, says, ‘Whilst the new rules have settled down quite quickly, principals and advisers have certainly experienced frustration in certain areas.

‘Hopefully the Panel’s review of the rule changes later this year will be an opportunity to reflect on some of these concerns.’

The London-headquartered law firm has identified stakebuilding as a tactic increasingly being used for deal protection. Its research finds that there has been an increased focus by bidders on exploring the benefits and assessing the risks of purchasing target shares during the course of a bid.

Jonny Myers, corporate partner at Clifford Chance, adds, ‘It is too early to decide whether private equity houses have been put off P2Ps [public-to-private deals].’

‘The number of deals and interest in possible public deals are more of a factor of the market generally than an indication that PE houses are no longer interested in participating.’