Osborne reforms set to hit big take private deals

THE corporate finance community could suffer an unwelcome winter chill as a result of a tweak in the Companies Act announced by the Chancellor in the Autumn Statement.

In particular large take-private deals by trade and private equity buyers who employ a structure called a Scheme of Arrangement – which is currently exempt from Stamp Duty –  could be set to fall foul of a change in the law which mights remove that exemption.

Stamp duty is charged at 0.5% of the deal value so on a £500m deal, the Treasury would collect £2.5m.

For a deal like the aborted £59bn offer for AstraZeneca from Pfizer this year, the tax take would be a whopping £295m.

Roger Hart, corporate partner at the Manchester office of Addleshaw Goddard spotted the tweak in the detail of the Autumn Statement and said: “The impact could be significant – in terms of generating revenue for the Treasury on big public companyy takeover deals – and would also have implications for the attractiveness of schemes of arrangement on those deals.”