Key characteristics and considerations related to share for share agreements

• Corporate Restructuring: Share for share agreements are commonly employed in corporate restructuring, mergers, or acquisitions where one company absorbs or combines with another.

• Exchange Ratio: The agreement specifies the exchange ratio, which outlines how many shares of the acquiring company will be given to the shareholders of the target company for each share they own in the target company. This ratio is often based on a valuation of both companies.

• Tax Implications: Share for share agreements can have tax implications for both the shareholders of the target company and the acquiring company. Depending on the jurisdiction and the specifics of the transaction, there may be tax advantages or consequences associated with this type of arrangement and clearance may be required from HMRC in advance.

• Shareholder Rights: Shareholders of the target company who receive shares in the acquiring company through the share for share agreement may become shareholders of the acquiring company. This can entail certain rights, such as voting rights and the potential to receive dividends or participate in future company decisions.