Dated at Wellington this 5th day of August 2008.
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 31 July 2008 and expires on 31 December 2008.
Mr Chips Holdings Limited (Mr Chips) is a code company. Simplot Mr Chips Limited has given notice of its intention to make a full offer for all of the equity securities of Mr Chips (the Simplot offer). Simplot Mr Chips Limited is indirectly wholly owned by J R Simplot Company, an Idaho-based conglomerate primarily involved in agribusiness.
Sinclair Long Term Holdings Limited, Balle Bros Group Limited, Anglesea Consulting Limited, Trevor and Jeanette Good, Jon Davison, Graeme Edwards and Graeme Ramsey (as the trustees of the G Edwards Family Trust), and Carol Edwards and Graeme Ramsey (as the trustees of the C Edwards Family Trust) are shareholders of Mr Chips (the significant shareholders) and each of them holds equity securities in Mr Chips. It is proposed that each of them will be allotted shares in Simplot Mr Chips Limited. The significant shareholders have entered into a shareholders' agreement with each other and Simplot Mr Chips Limited.
The significant shareholders are acting jointly or in concert with Simplot Mr Chips Limited for the purposes of making the Simplot offer. Rule 35 of the Takeovers Code (the Code) prevents them from accepting the Simplot offer.
Rule 35 of the Code is intended to prevent an offeror, or persons acting jointly or in concert with an offeror, from selling shares in the target company to defeat its own offer. However, rule 35 also prevents persons who are acting jointly or in concert with an offeror from accepting the offer made by that offeror in respect of any securities that they hold in the target company.
The Takeovers Panel (the Panel) has granted an exemption from rule 35 of the Code to enable each of the significant shareholders to accept the Simplot offer.
The Panel considers that it is appropriate and consistent with the objectives of the Code to grant the exemption because—