Tate & Lyle has announced a significant shift in its acquisition strategy by opting not to put its proposed £1.4 billion takeover of the US-based ingredient manufacturer CP Kelco to a shareholder vote. This move follows the recent relaxation of listing regulations.

Under previous regulations, the acquisition would have qualified as a class 1 transaction—defined as a deal involving more than 25 percent of a company’s capital—necessitating shareholder approval.

Following Tate’s initial announcement in June, the Financial Conduct Authority revised the rules to enhance London’s appeal as a listing venue and to reduce the likelihood of companies relocating to other markets.

Tate confirmed, “As a result, Tate & Lyle and Huber [the seller of CP Kelco] have mutually agreed that the obligation to seek approval from Tate & Lyle’s shareholders will no longer be applicable.”

The changes introduced in July have been positively received by the London Stock Exchange, as well as by legal and financial professionals engaged in public offerings. However, concerns have been raised by pension funds about potentially attracting less reputable companies to London and the risks of founders executing transactions that could disadvantage outside investors.

Now, transactions that surpass the 25 percent threshold and those categorized as “related party deals,” which may present conflicts of interest for directors, are exempt from shareholder votes. Companies lacking a substantial operating history also face fewer hurdles when seeking to go public.

Hammerson was among the first firms to utilize this new framework, deciding not to obtain shareholder approval for a £600 million property sale. Similarly, Vodafone announced it would not seek shareholder consent for the €8 billion sale of its Italian division to Swisscom, nor for the merger of Vodafone UK with Three UK.

Tate’s arrangement involves a payment of £905 million in cash to Huber, alongside £510 million in new shares of Tate, which will provide Huber with a 16 percent stake in the newly enlarged company. Moreover, Huber will have the right to appoint two non-executive directors to Tate’s board.

CP Kelco specializes in the production of ingredients that enhance the texture, or “mouthfeel,” of various processed foods such as yogurts, sauces, and dressings, contributing to creamier textures and improving crunchiness in baked goods and cereals.

Initially, the proposed acquisition faced skepticism due to CP Kelco’s recent financial downturn, causing Tate shares to decline from 677p to 600p shortly after the announcement. However, the share price has since rebounded, closing yesterday at 669p, up 0.5p, or 0.1 percent.