Dated at Auckland this 15th 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 applies to acts or omissions occurring on or after 19 July 2010 and expires on 31 January 2011.
The Takeovers Panel (the Panel) has granted an exemption from rule 6(1) of the Takeovers Code (the Code) for Talley’s Group Limited (Talley’s) in respect of any increase in Talley’s voting control of Open Country Dairy Limited (Open Country) resulting from an increase in its shareholding in AFFCO Holdings Limited (AFFCO) as a consequence of acceptances under Talley’s full takeover offer for AFFCO.
AFFCO is a code company and holds or controls 35.45% of the voting rights in Open Country. Open Country is an unlisted code company.
Talley’s holds or controls 52.83% of the voting rights in AFFCO. Talley’s also holds or controls 17.04% of the voting rights in Open Country.
Talley’s is proposing to make a full takeover offer for the remaining equity securities in AFFCO that it does not already hold. This takeover may increase the extent to which Talley’s shares with AFFCO, its associate, in the holding or control of AFFCO’s voting rights in Open Country. Consequently, Talley’s may be deemed, under rule 6(2)(c) of the Code, to have become the holder or controller of an increased percentage of voting rights in Open Country as a result of acceptances of its takeover offer for AFFCO.
The Panel has also granted an exemption from rule 6(1) of the Code for Talley's in respect of any increase in Talley’s voting control of Open Country resulting from a compulsory acquisition of equity securities in AFFCO under Part 7 of the Code (if, immediately after the acquisition of equity securities under the takeover offer, Talley's is the dominant owner of AFFCO).
The Panel considers that it is appropriate and consistent with the objectives of the Code to grant the exemptions because—
any increase in the percentage of voting rights in Open Country that are controlled by Talley’s would be a consequence of a takeover of AFFCO by Talley’s; and
that takeover is not being undertaken for the purpose of gaining control of voting rights in Open Country; and
the exemptions are consistent with the Panel’s policy for exemptions in respect of upstream acquisitions.