Statement of reasons

This notice (apart from clauses 7 and 8) applies to acts or omissions occurring on or after 30 September 2002. Clauses 7 and 8 apply to acts or omissions occurring on or after 14 August 2008. The notice expires on the close of 1 July 2011.

The Takeovers Panel (the Panel) has granted to certain specified persons a retrospective exemption from rule 6(1) of the Takeovers Code (the Code) in respect of any increase in those persons' voting control in Mascot Finance Limited (Mascot) as a result of certain specified historical transactions. The exemption is subject to a condition that requires all of the current Mascot ordinary shareholders to unanimously consent in writing to the increases in voting control.

Mascot is a Code company by virtue of having 50 or more shareholders.

Mascot has issued redeemable preference shares to members of the public (the redeemable preference shares). Although the redeemable preference shares are not voting securities for the purposes of the Code, the holders of those redeemable preference shares are considered to be shareholders for the purposes of the Code. The total number of redeemable preference shareholders together with voting security holders (ordinary shareholders) is greater than 50.

Mascot has 19 ordinary shareholders (the current Mascot ordinary shareholders, all named in Schedule 2), all of whom are considered associates for the purposes of the Code. Some of those persons are directors and senior employees of Mascot. The largest shareholder holds or controls about 82% of the voting rights in Mascot. The current Mascot ordinary shareholders are all party to shareholders' agreements.

Between September 2002 and March 2007 a number of transactions were undertaken that resulted in the current Mascot ordinary shareholders increasing their respective control percentages in Mascot. These increases in voting control appear to have resulted in inadvertent breaches of the Code. These transactions include buybacks by Mascot of its own voting securities, bonus issues of voting securities, trading in voting securities amongst ordinary shareholders, and transfers of voting securities by certain shareholders to family trusts or holding companies controlled by those shareholders. Some of the persons involved in the breaches of the Code have since exited the company.

The Panel considers it appropriate to grant the exemption and that the exemption is consistent with the objectives of the Code because—

• Mascot is a Code company only by virtue of having issued the redeemable preference shares; and

• the historical breaches of the Code by Mascot's ordinary shareholders appear to have been inadvertent; and

• the usual Code procedure for approving increases in a person's voting control is unworkable in Mascot's circumstances because all of the ordinary shareholders are considered to be associates for the purposes of the Code; and

• all affected shareholders have an opportunity to unanimously approve in writing all increases in voting control that occurred in breach of the Code. The affected shareholders will not be disadvantaged by not having all of the information and certifications required by the Code because of the proximity of the current Mascot ordinary shareholders to the business of the company and the availability of information from other sources.

The Panel has also, in clause 7, granted to the current Mascot ordinary shareholders an exemption from rule 6(1) of the Code in respect of any increase in any one of those person's voting control in Mascot as a result of—

• any future acquisition by Mascot of its own voting securities; or

• any future acquisition by the person of voting rights held or controlled by any other current Mascot ordinary shareholder.

The exemption is subject to the conditions that—

• the current Mascot ordinary shareholders unanimously consent in writing to any proposed increase in the voting control of a current Mascot ordinary shareholder as a result of the future acquisition; and

• a valuation of the company is undertaken by an independent valuer appointed by the board of Mascot, and a copy of that valuation is provided to each of the current Mascot ordinary shareholders in advance of the written consent given in accordance with the above condition.

The current Mascot ordinary shareholders wish to be able in the future to have the company buy back their voting securities and also to be able to acquire more voting securities from any other of the current Mascot ordinary shareholders. In the absence of an exemption, such transactions would be impossible because the Mascot ordinary shareholders cannot comply with the relevant provisions of the Code.

The Panel considers it appropriate to grant the exemption and that the exemption is consistent with the objectives of the Code because—

• Mascot is a Code company only by virtue of having issued the redeemable preference shares; and

• the usual Code procedure for approving increases in a person's voting control is unworkable in Mascot's circumstances because all of the ordinary shareholders are considered to be associates for the purposes of the Code; and

• all affected shareholders have an opportunity to unanimously approve in writing all increases in voting control as a result of the acquisition by Mascot of its own voting securities or by a current Mascot ordinary shareholder acquiring more voting securities from any other of the current Mascot ordinary shareholders. The affected shareholders will not be disadvantaged by not having all of the information and certifications required by the Code because of the proximity of the current Mascot ordinary shareholders to the business of the company and the availability of information from other sources.