UK trustees must be part of any discussion surrounding the sale of a sponsor company if it is to succeed, White & Case has urged.

The law firm warned that “due consideration” must be paid to any concerns raised by the trustees of defined benefit (DB) funds, noting the increasing perception that a trustee board can “hinder” any deals.

In a report drafted with consultancy Barnett Waddingham, it said early engagement was “essential”, as were any meaningful discussions about how a transaction could improve the future prospects of both the company and the fund.

“If the investor is looking to make changes to the plan, it must carry out an open and transparent consultation, which should be a genuine consultation and not merely a fait accompli,” it added.

The report stressed the importance of the consultation process in light of a High Court case involving changes to the UK’s IBM pension scheme, which sought to close to future accrual but was challenged due to “reasonable expectations” that earlier restructurings would prevent its closure.

“It is important for an employer,” the report added, “to appreciate that the IBM case was fact-specific and that, by following the approach suggested above, an employer should not be afraid to push back in negotiations with trustees when the concept of ‘reasonable expectations’ is raised.”

Greater transparency is now required when companies bid for rivals, after a 2013 change that required any bid to include mention of the new owner’s intention for any DB fund associated with the firm.

The changes were proposed by the Takeover Panel in 2012.