Dated at Auckland this 24th day of November 2011.
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 30 November 2011 and expires on 31 May 2012.
Trade Me Group Limited (TMG), a wholly owned subsidiary of Fairfax Media Limited (Fairfax), is making an initial public offer (IPO) of 34% of its shares. TMG intends to use the proceeds of the IPO as part of the consideration for the purchase of all of the shares in another of Fairfax’s wholly owned subsidiaries, Trade Me Limited (Trade Me). TMG will also issue 66% of its shares (the allotment) to Fairfax Digital Holdings NZ Limited (Fairfax Digital), a wholly owned subsidiary of Fairfax, in accordance with an agreement between TMG and Fairfax Digital (among others) (the agreement) entered into before the IPO. This will result in TMG being owned 34% by public shareholders and 66% by Fairfax Digital, and Trade Me being a wholly owned subsidiary of TMG.
The Takeovers Panel (the Panel) has granted an exemption for Fairfax Digital and for certain other Fairfax group companies (the Fairfax parties) in respect of rule 6(1) of the Takeovers Code (the Code). The Fairfax parties are—
Fairfax Media Limited:
Fairfax Media Publications Pty Limited:
John Fairfax Limited:
Fairfax Corporation Pty. Limited:
Fairfax New Zealand Holdings Limited.
The exemption relates to Fairfax Digital and the Fairfax parties becoming the holders or controllers of an increased percentage of the voting rights in TMG that would result from the allotment in accordance with the agreement and the IPO.
The exemption is subject to conditions that ensure that anyone who decides to invest in TMG will be able to take into account the maximum control percentage in TMG of Fairfax Digital and the Fairfax parties as a result of the allotment.
The Panel considers that it is appropriate and consistent with the objectives of the Code to grant the exemption because—
any person choosing to subscribe for shares in TMG for the first time can be expected to take into account an allotment that is notified to them in the combined prospectus and investment statement registered in relation to the IPO; and
if an offeree subscribes for TMG shares offered under the IPO on the basis of the information disclosed in the combined prospectus and investment statement that shows the potential maximum control percentage of the exempted persons, then the offeree can be taken to approve of the potential maximum control percentage to be held or controlled by the exempted persons; and
the exemption facilitates an IPO by a company that will only become a code company as a consequence of the IPO. The conditions attached to the exemption ensure that the exemption applies only to an offer that is effectively a preliminary step to TMG becoming a code company.