Dated at Auckland this 12th day of March 2009.
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 13 March 2009 and expires on 31 May 2012.
The Takeovers Panel (the Panel) has granted exemptions for—
Edinburgh Equity Nominee Limited (Edinburgh) from rule 7(d) of the Takeovers Code (the Code) to the extent that rule 7(d) requires the notice of meeting to be in accordance with rule 16(b) of the Code. The exemption from rule 7(d) is in respect of any increase of voting rights held by Edinburgh in BLIS Technologies Limited (BLIS) as a result of the allotment of voting securities to Edinburgh on conversion of mandatory cumulative preference shares (preference shares) to be allotted to it under a rights issue, some associated underwriting arrangements, and an associated option; and
BLIS from rule 16(b) of the Code in respect of the notice of meeting.
BLIS proposes to undertake a pro rata renounceable rights issue. Every shareholder will receive a right to subscribe for 1 preference share for every 45 ordinary shares held. The preference shares will automatically convert to ordinary shares on their third anniversary. The conversion ratio will be calculated by reference to the BLIS share price in the period immediately prior to conversion. The rights issue is to be fully underwritten by Edinburgh (the underwriting arrangements). Edinburgh will also hold an option to subscribe for a further 1 million preference shares in certain circumstances (the option).
The allotment of ordinary shares to Edinburgh on conversion of the preference shares allotted to it under the rights issue, underwriting arrangements, and option may result in it increasing its voting control above the 20% threshold in the fundamental rule of the Code. Accordingly, shareholder approval for that allotment is to be sought under rule 7(d) of the Code at a meeting of shareholders to be held on or about 30 March 2009. Rule 7(d) of the Code requires, among other things, that the notice of meeting contains the information specified by rule 16(b) of the Code. The rule 16(b) information will not be known at the time the notice of meeting is prepared because of uncertainties in the level of participation in the rights issue, the extent to which Edinburgh will exercise its option, and the BLIS ordinary share price in the period immediately prior to conversion.
The Panel considers that it is appropriate and consistent with the objectives of the Code to grant the exemptions because—
it is impossible for the actual number of voting securities to be allotted and the relevant percentages required by rule 16(b) to be stated in the notice of meeting, since these numbers and percentages are dependent on the extent to which shareholders of BLIS participate in the rights issue, the extent to which Edinburgh exercises its option, and the future price of BLIS ordinary shares:
all non-associated shareholders will have an opportunity to vote on the potential allotment of voting securities to Edinburgh under the various arrangements:
if the non-associated shareholders approve the potential maximum allotment of voting securities to Edinburgh, then, by implication, the shareholders also approve any lesser percentage of voting rights that may be acquired as a result of the conversion of the preference shares to be allotted to Edinburgh:
the rights issue will be pursuant to a registered prospectus. The ability for a shareholder to subscribe for securities under a rights issue and thus provide adequate funding to ensure a company's survival and growth is an acknowledged method of raising capital in New Zealand, and the Panel should facilitate these arrangements by granting appropriate exemptions where necessary.