Dated at Auckland this 14th day of July 2010.
The Common Seal of the Takeovers Panel was affixed in the presence of:
D O Jones,
Statement of reasons
This notice, which comes into force on the day after its notification in the Gazette, amends the Takeovers Code (A2 Corporation Limited) Exemption Notice 2010 (the principal notice).
In the principal notice, the Takeovers Panel (the Panel) granted—
an exemption from rule 7(d) of the Code for Freedom Nutritional Products Limited (FNP) to the extent that that rule would require the notice of meeting approving the allotment of shares to FNP to disclose the exact numbers specified by rule 16(b) of the Code; and
an exemption to A2 Corporation Limited (A2C) in respect of the notice of meeting.
The principal notice contains conditions that prohibit FNP from increasing its voting control except under the transactions for which the exemptions were granted, which are the exercise of the option and the exercise of a top-up option. An exception to this prohibition is for increases under clause 10 of the Takeovers Code (Class Exemptions) Notice (No 2) 2001. This allows FNP to increase its voting control under a capital raising right granted to FNP as part of the transaction.
This amendment notice expands that exception so that FNP can increase its voting control in reliance on any clause of the Takeovers Code (Class Exemptions) Notice (No 2) 2001. However, the amendment provides that if shareholder approval is sought for a buyback under clause 4 of the Takeovers Code (Class Exemptions) Notice (No 2) 2001, additional disclosures must be provided to shareholders. The disclosures inform them of the aggregate effect of the shareholder approval for the buyback and of the shareholder approval obtained in accordance with the exemptions in the principal notice and the Code.
The Panel considers that it is appropriate and consistent with the objectives of the Code to grant the amendment exemption because—
all non-associated shareholders will have an opportunity to vote on the potential allotment of voting securities to FNP under the transaction for which the exemptions in the principal notice were granted, and on any increase in FNP's voting control as a result of an acquisition by A2C of its own voting rights; and
if the non-associated shareholders approve the potential maximum allotment of voting securities to FNP under either of these situations, then, by implication, the shareholders also approve the allotment of a lesser number of voting securities to the option holders; and
the conditions of the exemption ensure that the aggregate effect of the shareholder approval for any acquisition by A2C of its own voting securities, and of the shareholder approval obtained in accordance with the exemptions in the principal notice, is disclosed to shareholders.