Dated at Auckland this 20th 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 11 August 2008 and expires on 31 December 2008.
The Takeovers Panel (the Panel) has granted exemptions to—
PGG Wrightson Limited (PGW) from rule 7(d) of the Takeovers Code (the Code) in respect of the requirements for a notice of meeting under rule 16(b) of the Code; and
Silver Fern Farms Limited (SFF) from rule 16(b) of the Code.
SFF has 2 classes of voting security on issue: supplier investment shares and rebate shares. Each of the supplier investment shares carries 1 vote on resolutions for the appointment of directors. Each of the rebate shares carries 1 vote on any resolution, subject to the holder (a rebate shareholder) being a current supplier as defined by SFF's constitution (a person who had supplied livestock to SFF under SFF's rebate supply method in the current or immediately preceding season).
It is proposed that PGW will be allotted a certain number of a new class of voting security in SFF: capital shares. Immediately following that allotment, the capital shares will confer 50% of the voting control in SFF on PGW. Accordingly, shareholder approval will be sought under rule 7(d) of the Code at a special meeting of shareholders to be held on or about 8 September 2008.
A record date of 11 August 2008 had been set for the meeting. Only those rebate shareholders who are current suppliers as at the record date will be entitled to attend and vote at the meeting. However, rebate shareholders who are not current suppliers as at the record date may supply livestock to SFF under its rebate supply method after that date. The voting rights attaching to those rebate shareholders' rebate shares would become exercisable and increase the number of voting securities in SFF.
Notice of the proposed special meeting cannot contain the percentage disclosures required by rule 16(b) of the Code. Those percentage disclosures would be calculated by reference to the number of voting securities on issue in SFF immediately after the allotment to PGW. This number would not be known with certainty until after the allotment because of the possibility that rebate shareholders who were not current suppliers as at the record date would become current suppliers before the allotment.
As noted above, SFF intends to obtain shareholder approval, in accordance with the Code, for the potential allotment of capital shares to PGW. However, SFF cannot comply with rule 16(b) of the Code before completion of the issue, because it cannot state in the notice of meeting the exact percentage of voting securities in SFF that the number of voting securities being allotted to PGW represents. These details would be known only after the allotment has been completed.
The Panel considers that it is appropriate and consistent with the objectives of the Code to grant the exemptions for the following reasons:
it is impossible for the relevant percentages required by rule 16(b) to be stated in the notice of meeting as these percentages are dependant on the total number of voting securities on issue in SFF after the allotment. This number is uncertain due to the possibility that rebate shareholders who are not current suppliers may become current suppliers after the record date and their rebate shares may become voting securities before the allotment:
all non-associated shareholders will have an opportunity to vote on the potential allotment of voting securities to PGW:
if the non-associated shareholders approve the potential maximum allotment of voting securities to PGW, then, by implication, the shareholders also approve any lesser percentage of voting securities that may be allotted to PGW.