Advisory fees earned by law firms working on mergers and acquisitions would be made public under proposals outlined this week by the takeover watchdog.

Opening a consultation on amendments to its code, the Takeover Panel has proposed that parties on each side of a bid should publicise their estimated spend on advisory fees, including a breakdown of estimates for lawyers, corporate brokers, and any other advisers.

If success fees or other variable fee mechanisms are in place, parties will have to disclose maximum and minimum amounts payable to each adviser, unless doing so would reveal commercially sensitive information regarding the offer.

Changes to published advisory fee estimates must be announced ‘promptly’, the panel said.

The panel said shareholders should be told how much directors are spending on advisers acting on M&A deals, because advisory fees account for a significant proportion of bid expenditure, and disclosure may give an indication of whether an adviser has an incentive to pressure its client to pursue a particular course of action.