Dated at Wellington this 4th day of August 2011.
The Common Seal of the Takeovers Panel was affixed in the presence of:
D O Jones,
Statement of reasons
This notice, which amends the Takeovers Code (Class Exemptions) Notice (No 2) 2001, comes into force on 12 August 2011.
If a partial offer for voting securities in a target company is oversubscribed, the Takeovers Code (the Code) requires acceptances to be scaled in accordance with the formula in rules 12 and 13 of the Code. The rules take no account of the beneficial ownership of voting securities held by trustee corporations, nominee companies, or bare trustees (custodians), who are offerees for the purposes of the Code because they are named on the share register of the target company. This may lead to a materially different result than if voting securities were held by the beneficial owners directly.
The notice exempts offerors from rules 12 and 13 where partial offers are oversubscribed. A condition of the exemption is that the offer document must include a request that custodians provide a certificate identifying the number of voting securities held by each relevant client for whom they are a custodian. The certificate must be provided no later than the close of the last day of the offer period. It is intended that, to enable the offeror to comply with its obligation to notify 1% increments in acceptances, custodians will provide acceptance forms on a progressive basis as they receive instructions to accept the offer from relevant clients.
If a certificate is received, the offeror must then, in effect, apply rules 12 and 13 as if the voting securities were held directly by the clients, in accordance with the numbers provided in the certificates, rather than on the basis that they are held by the custodian.
The Takeovers Panel considers that the exemption is appropriate and consistent with the objectives of the Code because—
if offerors choose to rely on the exemption, and if custodians comply with the offeror's request for a certificate, the owners of voting securities that are not held by a custodian would be treated fairly in comparison with the owners of voting securities held by a custodian when acceptances of a partial offer are subject to scaling: