Butterfly Printing plc ('Butterfly') is a multinational company whichhas been operating for nearly 60 years. Butterfly originally started as a company specialising in the printing of educational books for schools, colleges and universities. Since that time there have been many changes in the business of printing, particularly with the increasing use of digital media and the Internet. Butterfly has changed its business model to keep up with these developments but realises that it must continue to evolve asdifferentmarkets become more global and more competitive. Butterfly is a listed FTSE100company, registered in England & Wales, andhas an issued share capital of 300 million ordinary shares of 1 nominal value.

The Chief Executive, Mr Doors, agrees that a key issue for the company is to improve its strategic direction and manage its key business relationships more effectively. One of the areas into which Butterfly has expanded is the publication of medical information for use in hospitals and doctors' surgeries, in both printed and electronic formats. For this business venture, Butterfly acquired a 40% interest in Medical Press Ltd ('MP Ltd'). There are nine directors of MP Ltd, three of whom, including Mr Doors, have been appointed by Butterfly. The shareholders of MP Ltd are set out below:

Shareholder

Percentage of ordinary shares heldin MP Ltd

Butterfly

40%

Fortrumplc

25%

Royal Hospital Trust

35%

Youare asked toattend a meeting with Mr Aldwych, Chairman of Butterfly, and Mr Doors, the Chief Executive, on staff development, training and succession planning. Mr Aldwych is concerned thatperhapsFortrumplc will launch a takeover bid for Butterfly.

Prepare briefing note for Mr Aldwych and Mr Doors explaining why the City Code on Takeovers and Mergers ('the Takeover Code') is needed and when it would apply . (30 marks)