Dated at Wellington this 20th day of June 2005.
The Common Seal of the Takeovers Panel was affixed in the presence of:
Statement of reasons
This notice applies to acts or omissions occurring on or after 10 June 2005 and expires on the close of 31 July 2007.
The Takeovers Panel has granted exemptions to—
RetailX Limited (RTX) in respect of rule 16(b) of the Takeovers Code (the Code); and
Snowden Peak Investments Limited (Snowden Peak), Garry Donoghue (Donoghue), Andi Suryawan (Suryawan), and Grant Keith Baker, Donna Jean Baker, and Paul Anthony Smithies as trustees of the Baker Investment Trust (the Baker Trust) in respect of the rule 7(d) of the Code .
The exemptions relate to the increase in the voting control of Snowden Peak, Donoghue, Suryawan, and the Baker Trust in RTX that would result from the allotment of shares to them on the exercise of certain options (options).
RTX intends to purchase all the voting securities of Plus SMS Limited (Plus SMS), which is to be satisfied by way of issuing 240 million shares of RTX at 5 cents per share to Plus SMS shareholders and 10 million 12-month options and 20 million 24-month options to Snowden Peak, Donoghue, Suryawan, and the Baker Trust (the option holders).
RTX intends to obtain shareholder approval, in accordance with the Code, for the potential allotment of shares to the option holders under the terms of the options. However, the disclosures required by rule 16(b) of the Code cannot be determined in advance of the final exercise date for the options and RTX cannot comply with rule 16(b) of the Code because it cannot state in the notice of meeting—
The actual number of RTX voting securities to be allotted could be affected by uncertain future events. These future events include the extent to which the options are exercised and whether RTX undertakes some form of capital adjustment before the exercise of the options.
The Takeovers Panel considers that it is appropriate to grant the exemptions because—
it is not possible to state the actual numbers of shares to be allotted, and the percentage of shares that will be held or controlled by the person to whom the shares are being allotted, in the notice of meeting as required by rule 16(b) of the Code because the actual number of shares to be allotted could be affected by uncertain future events. These future events include the extent to which the options are exercised and whether RTX undertakes some form of capital adjustment before the exercise of the options; and
if the shareholders of RTX approve the number of shares that could be allotted to each of the option holders on the exercise of all of their options then, by implication, they can be taken to also approve that each of the option holders may be allotted a lesser number of shares; and
the issue of options by a purchaser as part of the satisfaction of the consideration for the acquisition to the vendor is an acknowledged market practice and the Takeovers Panel should facilitate this practice by the grant of appropriate exemptions.
The Takeovers Panel considers that the exemptions are consistent with the objectives of the Code because the non-associated shareholders of RTX will have an opportunity to vote on the allotment of voting securities to each of the option holders.