What is required from the board of the target company according to Takeover Code Rule 3?

Under Takeover Code Rule 3, the board of the target company is required to seek independent advice and disclose the substance of that advice to shareholders. This is crucial because it ensures that the board provides its shareholders with informed guidance regarding the offer made for the company. The process of seeking independent advice helps the board to evaluate the merits and implications of the takeover bid without any potential bias, allowing for an objective assessment of whether the offer is in the best interest of its shareholders.

Moreover, disclosing the substance of this independent advice is vital for transparency, as it enables shareholders to understand the rationale behind the board's recommendations or actions concerning the offer. This rule reinforces the board's duty to act in the best interest of shareholders by ensuring they have access to all relevant information before making decisions regarding a takeover bid.