Statement of reasons

This notice applies to acts or omissions occurring on or after 6 October 2006 and expires on 31 December 2007. The Takeovers Panel has granted 2 exemptions from the Takeovers Code (the Code) to Bacardi New Zealand Holdings Limited (Bacardi NZ).

Exemption from rule 6(1) of Code

The Takeovers Panel has exempted Bacardi NZ from compliance with rule 6(1) of the Code in relation to the exercise of convertible securities acquired under a full offer (the offer) by Bacardi NZ for all of the equity securities in 42 Below Limited (42 Below).

In addition to ordinary shares, 42 Below has the following 5 classes of equity security on issue that are the subject of the offer (the convertible securities):

• •options to subscribe for ordinary shares in 42 Below issued to Panache International LLC:

• •options to subscribe for ordinary shares in 42 Below issued to Macquarie New Zealand Limited:

• •rights to subscribe for ordinary shares in 42 Below issued to James Dale:

• •rights to subscribe for ordinary shares in 42 Below issued to Paunui Holdings Pty Limited:

• •warrants to subscribe for ordinary shares issued by 42 Below to Simon Coley.

Rule 6(1)(b) of the Code provides that a person who holds or controls 20% or more of the voting rights in a code company may not, except as provided in rule 7 of the Code, become the holder or controller of an increased percentage of the voting rights in the code company.

If Bacardi NZ holds more than 50% and less than 90% of the voting rights in 42 Below following completion of the offer, Bacardi NZ is likely to hold convertible securities issued by 42 Below. The conversion of the convertible securities into 42 Below shares would be a breach of rule 6(1)(b) of the Code, unless one of the exceptions in rule 7 applied.

The Takeovers Panel considers that it is appropriate and consistent with the objectives of the Code to grant the exemption from rule 6(1) of the Code for the following reasons:

• •the increase will be the result of the exercise of rights attaching to securities obtained under the offer for which Bacardi NZ was obliged under the Code to make an offer:

• •the resulting increase will be the same as if the holder of the convertible securities had converted those securities into shares and then accepted the offer in respect of the resulting shares.

Exemption from rule 8(2) of Code

The Takeovers Panel has exempted Bacardi NZ from rule 8(2) of the Code to the extent that it would be required to include in the offer an offer for series 2 warrants (the warrants) issued by 42 Below. Rule 8(2) of the Code requires that a full offer must include an offer for all of the securities in each class of equity securities in the target company.

The warrants may be exercised between 29 September and 27 October 2006 and lapse after the end of that period. Bacardi NZ intends to make the offer after the date of expiry of the warrants, but to send its notice of intention to make an offer before that date. As the warrants will still be on issue at the time of the takeover notice, Bacardi NZ would, without an exemption from rule 8(2), be required to include in its draft offer accompanying the takeover notice an offer for the warrants, despite the fact that Bacardi NZ intends that the actual takeover offer will not include an offer for the warrants as the warrants will have expired.

The Takeovers Panel considers that it is appropriate and consistent with the objectives of the Code to grant the exemption from rule 8(2) of the Code because the warrants will have ceased to exist by the time the offer is made and the offer will not need to include an offer for the warrants.