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Produced with input from Rebecca Cousin of Slaughter and May on market practice.

This Practice Note looks at the detailed procedures to be followed to implement the acquisition by a buyer (offeror) of all the Shares, or one or more classes of shares, in a company (offeree) which it does not already own under a Scheme of Arrangement made under Part 26 of the Companies Act 2006 (CA 2006) (scheme).

Unlike a takeover offer, a scheme involves no contract between the offeror and offeree shareholders. Instead, it is a statutory mechanism used to implement a range of corporate transactions. In a takeover context, a scheme is put forward by the offeree to its shareholders, or to the holders of the relevant class of shares. The involvement, and cooperation, of the offeree's board of Directors is therefore usually required. A scheme is typified by certain essential characteristics, most significantly that it will require both offeree shareholder approval at a court-convened meeting and sanction by the court itself.

For an explanation of the nature of Schemes of arrangement, how they are structured