Therefore, their spirit must be observed as well as their letter. Although most of the rules are expressed in less general terms than the General Principles, they are not framed in technical language, and like the General Principles, are to be interpreted to achieve their underlying purpose.
In addition to the General Principles, the Code contains a series of rules. They are applied in accordance with their spirit in order to achieve their underlying purpose. They are expressed in broad general terms and the Code does not define the precise extent of, or the limitations on, their application. They apply to takeovers and other matters to which the Code applies. These General Principles are the same as the general principles set out in Part 1 of Schedule 1C to the Companies Act 2006. The Code is based upon six General Principles, which are essentially statements of standards of commercial behaviour. The rules set out in the Code have a statutory basis in the United Kingdom, the Isle of Man, Jersey and Guernsey.
The City Code on Takeovers and Mergers (the “Code”) has been developed since 1968 to reflect the collective opinion of those professionally involved in the field of takeovers as to appropriate business standards and as to how fairness to shareholders and an orderly framework for takeovers can be achieved.