Dated at Auckland this 15th day of May 2007.
The Common Seal of the Takeovers Panel was affixed in the presence of:
D O Jones,
Statement of reasons
This notice applies to acts or omissions occurring on or after 10 May 2007.
Dairy Trust Limited intends to make a scrip full takeover offer (offer) for ordinary shares in Open Country Cheese Company Limited (OCC). Unless the offer is varied, the consideration payable to accepting OCC shareholders under the offer will be satisfied in full by the issue of fully paid ordinary shares in Dairy Trust Limited (Dairy Trust Limited shares). The Dairy Trust Limited shares will be issued under a combined registered prospectus and investment statement (prospectus).
At the date of this notice—
AFFCO Holdings Limited (AFFCO) holds all of the ordinary shares in Dairy Trust Limited (through its wholly owned subsidiary AFFCO New Zealand Limited):
Talleys Fisheries Limited (Talleys) holds 50.01% of the ordinary shares in AFFCO:
Talleys owns 29.9% of the ordinary shares in OCC.
It is likely that Dairy Trust Limited will become a code company as a consequence of the offer. If Talleys accepts the offer it will increase its holding of voting rights in Dairy Trust Limited. Following that increase, Talleys and its associate AFFCO, will hold or control more than 20% of the voting rights in Dairy Trust Limited. Accordingly, the Takeovers Panel has granted Talleys an exemption from rule 6(1) of the Code in respect of any increase in the holding or control by Talleys of voting rights in Dairy Trust Limited resulting from the allotment of Dairy Trust Limited shares to Talleys under the offer.
The Takeovers Panel considers that it is appropriate and consistent with the objectives of the Code to grant the exemption because—
any person choosing to subscribe for shares in Dairy Trust Limited for the first time can be expected to take into account allotments that are notified to them in the prospectus; and
as a condition of the exemption, the prospectus must state the maximum number of securities that could be allotted to Talleys in Dairy Trust Limited, the potential maximum control percentage in Dairy Trust Limited that could be held or controlled by Talleys and by AFFCO, and the potential maximum aggregate control percentage in Dairy Trust Limited held or controlled by Talleys and its associates and by Talleys and the other founding shareholders. If an offeree subscribes for Dairy Trust Limited shares under the offer on the basis of this information, the offeree can be taken to approve of the potential maximum control percentages held or controlled by Talleys; and
the exemption facilitates the offer by Dairy Trust Limited, which will become a code company as a consequence of the offer. The conditions limit the application of the exemption to an offer that is a preliminary step to Dairy Trust Limited becoming a code company.