Company Law Reform Bill [HL]

moved Amendment No. A9:"Page 250, line 35, leave out subsection (3)." The noble Lord said: I am still working my way through Clause 526 on the ““Meaning of ‘offer to the public’””. This is a probing amendment which we have tabled following representations from a City law firm. The clause specifies that an offer is not an offer to the public if,"““in all the circumstances””," it can properly be regarded as,"““not being calculated to result, directly or indirectly, in securities of the company becoming available to persons other than those receiving the offer””." So, coming back to my IPO point, it is difficult to see how fund-raising, where the exit strategy is to pursue an offering of the shares to the public in the short to medium term, can be regarded other than as indirectly making the securities available to the public. An example of where this part of the Bill lacks certainty is where a private company is bought by a private equity house with the view of turning it into a more successful business and then selling it to realise its investment. Obviously it may do this by means of a direct sale to a corporate inquirer but very often it may be by means of an IPO. We would like a little more detail from the Government as to whether such an action is caught by the clause. If it is, it will make a huge difference to the way in which the industry operates. Clearly it will have to consider its funding and the basis on which investments are made. This is a probing amendment. I beg to move.