Clarkslegal LLP - Solicitors in Reading and London

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Arsenal "take over" bid by Kroenke Sports Enterprises

11 April 2011 #Employment


Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.

It has been widely reported in the press today that Stan Kroenke of Kroenke Sports Enterprises has purchased a controlling shareholding in Arsenal Football Club. The press commentary has focused on the impact of the takeover on football as a whole as well as on the fans. But what happens to employees of businesses such as Arsenal when a share sale takes place?

The first important thing to note is that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) do not apply to share sales. However once a share sale has completed, if the purchased business is integrated into the business of the purchaser so called internal TUPE`s may occur triggering protection under the regulations. This is a complicated issue and any Buddy members who think this may apply to them should call the helpline or contact the Clarkslegal Employment Team.

A second important consideration is how to retain key staff within the business as there is always a risk on takeover that staff will chose to jump ship. Purchasers will need to negotiate directly with key staff in order to obtain their commitment to remain with the business. This is usually achieved by changing terms and conditions of employment (note the restrictions on such changes if TUPE applies). Changes will normally include salary increases, extended notice periods or loyalty bonuses. Changes to terms of employment can usually only be undertaken with the consent of an employee and so the buyer will need to ensure the changes are attractive to the employee in question.

Any liability for claims by employees (such as personal injury or Tribunal claims) will also be "bought" by the purchaser who will effectively become liable for the claims. A prudent purchaser will seek indemnities from a target company prior to the completion of a takeover to cover such claims. For more information in this regard please contact the Company and Commercial Department at Clarkslegal LLP.

If, following a takeover, the purchaser intends to make 20 or more employees redundant, collective consultation obligations will apply.

For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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