Dated at Wellington this 2nd day of July 2004.
The Common Seal of the Takeovers Panel was affixed in the presence of:
Statement of reasons
This notice applies to acts or omissions occuring on or after 28 June 2004. The Takeovers Panel has exempted Alan Evan McConnon and Sandra Anne Keay from compliance with rule 6(1) of the Takeovers Code (the Code) in respect of an increase in the percentage of voting rights in Wrightson Limited (Wrightson) held or controlled by them, or deemed to be held or controlled by them, resulting from the acquisition by each of them of 5 000 shares in Wrightson from parties associated with Rural Portfolio Investments Limited (RPI).
RPI is the holder and controller of 50.01% of the issued shares in Wrightson. It wishes to nominate Mr McConnon and Ms Keay for appointment to the Wrightson board. Under the terms of the Wrightson constitution, in order for a person to be nominated as a director he or she must own beneficially at least 5 000 equity securities in Wrightson. As neither Mr McConnon nor Ms Keay held any equity securities in Wrightson it was proposed that they each acquire a parcel of 5 000 shares from Michael Craig Norgate and John Baird McConnon, who are directors of RPI.
As Mr McConnon and Ms Keay are likely to be associates of RPI, Mr Norgate, and Mr Baird McConnon for the purposes of the Code, the acquisition of any Wrightson shares by them is subject to the deeming provisions in rule 6(2)(b) of the Code. Rule 6(2)(b) provides that, for the purposes of rule 6(1), if a person or persons together hold or control voting rights and another person joins that person or all or any of those persons in the holding or controlling of those voting rights as associates, the other person is deemed to have become the holder or controller of those voting rights. Accordingly, in the absence of an exemption Mr McConnon and Ms Keay would be unable to acquire the relevant parcels of shares from Mr Norgate and Mr Baird McConnon unless they were able to utilise one of the exceptions contained in rule 7 of the Code.
The Panel considers that it is appropriate to grant the exemption from rule 6(1) of the Code in respect of the acquisition of a parcel of 5 000 Wrightson shares each by Mr McConnon and Ms Keay from Mr Baird McConnon and Mr Norgate respectively because, although the acquisition of securities in Wrightson by Mr McConnon and Ms Keay results in those persons being deemed to become the holders or controllers of more than 20% of the voting rights in Wrightson under rule 6(2)(b), there is no effective change in the control of voting rights in Wrightson as a result of the acquisition.
The Panel considers that the exemption is consistent with the objectives of the Code because
•the acquisition will not result in an effective change of voting control in Wrightson and will not disadvantage shareholders of that company; and
•the exemption maintains a proper relation between the cost of compliance with the Code and the benefits resulting from it.