40. Associates

(1) In this Chapter "associate", in relation to a bidder, means —
(a) a nominee of the bidder,
(b) a holding company, subsidiary or fellow subsidiary of the bidder or a nominee of such a holding company, subsidiary or fellow subsidiary,
(c) a body corporate in which the bidder is substantially interested,
(d) a person who is, or is a nominee of, a party to a share acquisition agreement with the bidder, or
(e) (where the bidder is an individual) his spouse, parents, any person with whom he shares a parent or grandparent and any minor child or step-child of his.
(2) For the purposes of subsection (1)(b) a company is a fellow subsidiary of another body corporate if both are subsidiaries of the same body corporate but neither is a subsidiary of the other.
(3) For the purposes of subsection (1)(c) a bidder has a substantial interest in a body corporate if —
(a) the body or its directors are accustomed to act in accordance with his directions or instructions, or
(b) he is entitled to exercise or control the exercise of one-third or more of the voting power at general meetings of the body.
Subsections (2) and (3) of section 755 (Interest in shares: corporate interests) of the Companies Regulations 2015 (which contain provision about when a person is treated as entitled to exercise or control the exercise of voting power) apply for the purposes of this subsection as they apply for the purposes of that section.
(4) For the purposes of subsection (1)(d) an agreement is a share acquisition agreement if —
(a) it is an agreement for the acquisition of, or of an interest in, shares to which the offer relates,
(b) it includes provisions imposing obligations or restrictions on any one or more of the parties to it with respect to their use, retention or disposal of such shares, or their interests in such shares, acquired in pursuance of the agreement (whether or not together with any other shares to which the offer relates or any other interests of theirs in such shares), and
(c) it is not an excluded agreement (see subsection (5)).
(5) An agreement is an "excluded agreement" —
(a) if it is not legally binding, unless it involves mutuality in the undertakings, expectations or understandings of the parties to it, or
(b) if it is an agreement to underwrite or sub-underwrite an offer of shares in a company, provided the agreement is confined to that purpose and any matters incidental to it.
(6) The reference in subsection (4)(b) to the use of interests in shares is to the exercise of any rights or of any control or influence arising from those interests (including the right to enter into an agreement for the exercise, or for control of the exercise, of any of those rights by another person).
(7) In this section —
(a) "agreement" includes any agreement or arrangement, and
(b) references to provisions of an agreement include —
(i) undertakings, expectations or understandings operative under an arrangement, and
(ii) any provision whether express or implied and whether absolute or not.