Takeovers Code (Unmarketable Parcels) Exemption Notice 2003

Reprint
as at 5 September 2003

Crest

Takeovers Code (Unmarketable Parcels) Exemption Notice 2003

(SR 2003/234)


Note

Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.

A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This notice is administered by the Takeovers Panel.


Pursuant to section 45 of the Takeovers Act 1993, the Takeovers Panel gives the following notice (to which is appended a statement of reasons of the Takeovers Panel).

Notice

1 Title
  • This notice is the Takeovers Code (Unmarketable Parcels) Exemption Notice 2003.

2 Commencement
  • This notice comes into force on 1 September 2003.

3 Interpretation
  • (1) In this notice, unless the context otherwise requires,—

    Act means the Takeovers Act 1993

    cash alternative means alternative consideration, under a scrip offer, of wholly cash

    Code means the Takeovers Code approved by the Takeovers Code Approval Order 2000 (SR 2000/210)

    consideration securities means securities that are quoted on a stock exchange and that are offered as consideration under a scrip offer

    offer means a takeover offer made under the Code

    scrip offer means an offer under which the consideration includes consideration securities (whether or not that consideration also includes cash or any other additional consideration, and whether or not that offer also includes a cash alternative)

    security has the same meaning as in the Securities Act 1978

    small security holder means a person who would, if that person was offered, and accepted, consideration securities under a scrip offer, receive an unmarketable parcel of consideration securities

    stock exchange means, in respect of any consideration securities, the securities exchange that is the primary exchange of the issuer of the consideration securities

    target security means, in respect of an offer, a security of the target company to which the offer extends

    unmarketable parcel means a number of consideration securities that is less than the minimum holding of consideration securities specified by the stock exchange

    weighted average price, in respect of consideration securities, means the weighted average of the closing prices of those consideration securities on the stock exchange over the period of the 5 trading days immediately preceding the date that is 5 days before the first date when consideration is sent to any offeree who has accepted the offer.

    (2) Any term or expression that is defined in the Act or the Code and used, but not defined, in this notice has the same meaning as in the Act or the Code.

4 Exemption from rule 20 of Code
  • Every person who makes a scrip offer is exempted from rule 20 of the Code to the extent that the consideration offered to small security holders is cash only.

5 Condition of exemption in case of scrip offer without cash alternative
  • In the case of a scrip offer without a cash alternative in respect of the relevant class of target securities, the exemption in clause 4 is subject to the condition that the cash offered to small security holders in respect of each target security in that class is the sum of—

    • (a) the weighted average price of the consideration securities multiplied by the number of consideration securities offered generally under the scrip offer for each target security in that class; and

    • (b) any additional consideration (if any) offered generally under the scrip offer for each target security in that class.

6 Condition of exemption in case of scrip offer with cash alternative
  • In the case of a scrip offer with a cash alternative in respect of the relevant class of target securities, the exemption in clause 4 is subject to the condition that the cash offered to small security holders in respect of each target security in that class is the greater of—

    • (a) the cash alternative; and

    • (b) the sum of—

      • (i) the weighted average price of the consideration securities multiplied by the number of consideration securities offered generally under the scrip offer for each target security in that class; and

      • (ii) any additional consideration (if any) offered generally under the scrip offer for each target security in that class.

Dated at Auckland this 27th day of August 2003.

The Common Seal of the Takeovers Panel was affixed in the presence of:

[Seal]

J C King,
Chairperson.


Statement of reasons of Takeovers Panel

Rule 20 of the Takeovers Code requires an offer to be made on the same terms and provide the same consideration for all securities of the same class. The effect is that an offeror who makes a takeover offer with consideration that includes securities listed on a stock exchange may be obliged to provide some smaller security holders with an unmarketable parcel of securities. Unmarketable parcels of securities may be difficult for security holders to deal with and are expensive for companies to administer.

Consequently the Takeovers Panel has granted a class exemption to allow offerors to limit the consideration offered to small security holders to cash.

The Takeovers Panel considers that it is appropriate to grant the exemption in the interests of market efficiency.

The Takeovers Panel considers that the exemption is consistent with the objectives of the Takeovers Code because it retains the principle of providing equal consideration to all security holders in the target company while at the same time promoting efficiency in the market and reducing costs for offerors and target company security holders.


Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 4 September 2003.


Contents

  • 1General

  • 2Status of reprints

  • 3How reprints are prepared

  • 4Changes made under section 17C of the Acts and Regulations Publication Act 1989

  • 5List of amendments incorporated in this reprint (most recent first)


Notes
1 General
  • This is a reprint of the Takeovers Code (Unmarketable Parcels) Exemption Notice 2003. The reprint incorporates all the amendments to the notice as at 5 September 2003, as specified in the list of amendments at the end of these notes.

    Relevant provisions of any amending enactments that have yet to come into force or that contain relevant transitional or savings provisions are also included, after the principal enactment, in chronological order.

2 Status of reprints
  • Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment. This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.

    This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

3 How reprints are prepared
  • A number of editorial conventions are followed in the preparation of reprints. For example, the enacting words are not included in Acts, and provisions that are repealed or revoked are omitted. For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/legislation/reprints.shtml or Part 8 of the Tables of Acts and Ordinances and Statutory Regulations, and Deemed Regulations in Force.

4 Changes made under section 17C of the Acts and Regulations Publication Act 1989
  • Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice. Changes that would alter the effect of the legislation are not permitted.

    A new format of legislation was introduced on 1 January 2000. Changes to legislative drafting style have also been made since 1997, and are ongoing. To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.

    In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint:

    • omission of unnecessary referential words (such as of this section and of this Act)

    • typeface and type size (Times Roman, generally in 11.5 point)

    • layout of provisions, including:

      • indentation

      • position of section headings (eg, the number and heading now appear above the section)

    • format of definitions (eg, the defined term now appears in bold type, without quotation marks)

    • format of dates (eg, a date formerly expressed as the 1st day of January 1999 is now expressed as 1 January 1999)

    • position of the date of assent (it now appears on the front page of each Act)

    • punctuation (eg, colons are not used after definitions)

    • Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly

    • case and appearance of letters and words, including:

      • format of headings (eg, headings where each word formerly appeared with an initial capital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter)

      • small capital letters in section and subsection references are now capital letters

    • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly

    • running heads (the information that appears at the top of each page)

    • format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chronological).

5 List of amendments incorporated in this reprint (most recent first)