Takeovers Code (Pharmacybrands Limited) Exemption Notice 2012

2012/199

Coat of Arms of New Zealand

Takeovers Code (Pharmacybrands Limited) Exemption Notice 2012

Pursuant to section 45 of the Takeovers Act 1993, the Takeovers Panel gives the following notice (to which is appended a statement of reasons of the Takeovers Panel).

Notice

1 Title
  • This notice is the Takeovers Code (Pharmacybrands Limited) Exemption Notice 2012.

2 Application
  • This notice applies to acts or omissions occurring on or after 3 August 2012.

3 Expiry
  • This notice expires on the close of 31 December 2017.

4 Interpretation
  • (1) In this notice, unless the context otherwise requires,—

    Act means the Takeovers Act 1993

    Code means the Takeovers Code under the Act

    notice of meeting means the notice of meeting for Pharmacybrands’ 2012 annual meeting containing the proposed resolution to approve the specified transaction

    Pharmacybrands means Pharmacybrands Limited

    specified period means the period commencing on 3 August 2012 and expiring on the close of 31 December 2017

    specified shareholder means each of—

    • (a) Cape Healthcare Limited; and

    • (b) LPL Trustee Limited

    specified transaction means the dividend reinvestment plan under which Pharmacybrands proposes to offer pro rata share allotments in Pharmacybrands

    voting security means a voting security in Pharmacybrands.

    (2) In this notice, a reference to a person increasing voting control is a reference to the person becoming the holder or controller of an increased percentage of the voting rights in Pharmacybrands.

    (3) Any term or expression that is defined in the Act or the Code and used, but not defined, in this notice has the same meaning as in the Act or the Code.

5 Exemption from rule 7(d) of Code for specified shareholders in respect of notice of meeting
  • In relation to an increase in voting control resulting from an allotment under the specified transaction during the specified period, a specified shareholder is exempted from rule 7(d) of the Code to the extent that that rule requires the notice of meeting to comply with rule 16(b) and (d) of the Code.

6 Exemption from rule 16(b) and (d) of Code for Pharmacybrands in respect of notice of meeting
  • In relation to an increase in voting control resulting from an allotment under the specified transaction during the specified period, Pharmacybrands is exempted from rule 16(b) and (d) of the Code in respect of issuing the notice of meeting.

7 Conditions of exemptions in clauses 5 and 6
  • The exemptions in clauses 5 and 6 are subject to the conditions that—

    • (a) the terms of the specified transaction are approved by the Panel; and

    • (b) the specified shareholders do not vote on the resolution to approve the specified transaction; and

    • (c) Pharmacybrands discloses in the notice of meeting the information specified in clauses 2 and 3 of the Schedule; and

    • (d) Pharmacybrands and the specified shareholders comply with clauses 4 to 9 of the Schedule (as applicable).


Schedule
Further conditions of exemptions

cl 7

1 Interpretation
  • In this schedule, unless the context otherwise requires,—

    annual report includes any concise annual report (as defined in section 2(1) of the Companies Act 1993)

    approved maximum number means, in relation to the specified transaction, the maximum number of voting securities that could be allotted to a specified shareholder during the specified period under the specified transaction, and is the number required to be disclosed under clause 2(c)(i) of this schedule

    approved maximum percentage means, in relation to the specified transaction, the maximum percentage of all voting securities on issue that a specified shareholder could hold or control on completion of the specified transaction during the specified period, and is the percentage figure required to be disclosed under clause 2(c)(iii) of this schedule

    calculation date means the date, identified in the notice of meeting, used for determining the matters referred to in clause 3 of this schedule

    exempt associates, in relation to a specified shareholder, means the class of persons who are associates of a specified shareholder who are also relying on the exemption in clause 6 of this notice in relation to the specified transaction

    other-means increase means an increase in voting control in Pharmacybrands that is effected by a means other than an allotment under the specified transaction during the specified period

    price formula means the formula for determining the price at which voting securities will be allotted under the specified transaction, as set out in the terms of the specified transaction.

2 Notice of meeting
  • The notice of meeting must contain, or be accompanied by, the following:

    • (a) full particulars of the specified transaction:

    • (b) the name of each specified shareholder:

    • (c) the following particulars of the voting securities to be allotted under the specified transaction during the specified period:

      • (i) the approved maximum number:

      • (ii) the approved maximum number expressed as a percentage of all voting securities on issue after all allotments under the specified transaction during the specified period:

      • (iii) the approved maximum percentage:

      • (iv) the maximum percentage of all voting securities on issue that each specified shareholder and the specified shareholder's associates (other than exempt associates) could hold or control in aggregate on completion of the specified transaction during the specified period:

      • (v) the maximum percentage of all voting securities on issue that each specified shareholder and all the specified shareholder's associates could hold or control in aggregate on completion of the specified transaction during the specified period:

    • (d) full particulars of the price formula:

    • (e) a statement, in addition to the statement required by rule 16(f) of the Code, that the disclosures made in the notice of meeting have been modified in reliance on this exemption notice:

    • (f) the assumptions on which the particulars referred to in paragraph (c) are based, which must include the assumptions referred to in clause 3(2) of this schedule:

    • (g) the calculation date.

3 Assumptions
  • (1) The assumptions set out in subclause (2) must be applied for the purpose of providing the particulars specified in clause 2(c) of this schedule.

    (2) The assumptions are as follows:

    • (a) that the number of voting securities is the number of voting securities on issue on the calculation date:

    • (b) that there is no change in the total number of voting securities on issue between the calculation date and the end of the specified period, other than as a result of the specified transaction:

    • (c) that, in relation to clause 2(c)(i) to (iii) of this schedule, the specified shareholder elects full participation under the specified transaction in respect of each dividend during the specified period to which the specified transaction applies and is allotted the approved maximum number of voting securities under the specified transaction:

    • (d) that, in relation to clause 2(c)(iv) of this schedule, the specified shareholder and each of the specified shareholder’s associates (other than exempt associates) are allotted the maximum number of voting securities under the specified transaction in the manner described in paragraph (c) (which must be read as if the references to a specified shareholder were references to the specified shareholder together with each of the specified shareholder’s associates other than exempt associates):

    • (e) that, in relation to clause 2(c)(v) of this schedule, the specified shareholder and each of the specified shareholder’s associates are allotted the maximum number of voting securities under the specified transaction in the manner described in paragraph (c) (which must be read as if the references to the specified shareholder were references to the specified shareholder together with all the specified shareholder’s associates):

    • (f) that, in relation to clause 2(c) of this schedule, each specified shareholder and each of the specified shareholder’s associates do not increase their voting control of Pharmacybrands by way of an other-means increase:

    • (g) that the issue prices of voting securities under the specified transaction determined in accordance with the price formula will be $0.96 in each year of the specified period:

    • (h) that the net cash dividend payable by Pharmacybrands in each year of the specified period will be $0.035 per share:

    • (i) that no shareholder of Pharmacybrands, other than a specified shareholder, elects to participate in the specified transaction:

    • (j) any other assumptions that are reasonably necessary to ensure that shareholders are provided with the material information required for them to be able to determine whether to approve the specified transaction.

4 Restriction on increase above approved maximum percentage
  • Until the end of the specified period, a specified shareholder must not hold or control a percentage of voting securities that exceeds the approved maximum percentage, except as a result of an other-means increase that complies with clause 7 of this schedule.

5 Annual report disclosures
  • Every annual report of Pharmacybrands issued during the specified period, and the first annual report issued after the end of the specified period, must include in a prominent position the following matters:

    • (a) a statement to the effect that the allotment of voting securities under the specified transaction during the specified period has been approved and a statement as to where a copy of the terms of the specified transaction may be obtained; and

    • (b) a statement, as at the end of the financial year to which the report relates, of—

      • (i) the number of voting securities allotted to each specified shareholder under the specified transaction; and

      • (ii) the number of voting securities on issue that are held or controlled by each specified shareholder, and the percentage of all voting securities on issue that that number represents; and

      • (iii) the percentage of all voting securities on issue that are held or controlled, in aggregate, by each specified shareholder and the specified shareholder's associates; and

      • (iv) the maximum percentage of all voting securities on issue that could be held or controlled by each specified shareholder on completion of all allotments that could yet be made under the specified transaction during the specified period; and

      • (v) the maximum percentage of all voting securities on issue that could be held or controlled, in aggregate, by each specified shareholder and the specified shareholder's associates on completion of all allotments that could yet be made under the specified transaction during the specified period; and

    • (c) a statement of the assumptions on which the particulars referred to in paragraph (b) are based.

6 Internet site disclosures for ongoing allotments
  • (1) This condition applies if Pharmacybrands has an Internet site.

    (2) Following the issue of the first annual report during the specified period and up to the issue of the first annual report after the end of the specified period, Pharmacybrands must disclose on its Internet site the information required under clause 5 of this schedule to be disclosed in an annual report.

    (3) During the specified period and up to the issue of the first annual report after the end of the specified period, Pharmacybrands must—

    • (a) announce on its Internet site any aggregate increase of 1% or more in the voting securities held or controlled by a specified shareholder since the date of the last announcement under this paragraph or, where no prior announcement has been made, since the date of the first aggregate increase of 1% or more in the voting securities held by the specified shareholder; and

    • (b) maintain every such announcement on its Internet site in a prominent position.

    (4) The announcement referred to in subclause (3)(a) must be made as soon as Pharmacybrands is aware, or ought to be aware, that the relevant increase has occurred.

7 Other-means increases
  • (1) During the specified period, a specified shareholder must not increase its voting control in Pharmacybrands by way of an other-means increase unless the other-means increase—

    • (a) is by an acquisition of voting securities approved in accordance with rule 7(c) of the Code; or

    • (b) is by an allotment of voting securities approved in accordance with rule 7(d) of the Code; or

    • (c) is permitted by another exemption granted by the Panel.

    (2) If approval by Pharmacybrands’ shareholders is required under subclause (1)(a) or (b), the notice of meeting containing the resolution to approve the other-means increase must contain or be accompanied by the following:

    • (a) a statement to the effect that the allotment of voting securities under the specified transaction during the specified period has been approved and a statement as to where a copy of the terms of the specified transaction may be obtained; and

    • (b) a statement, as at the date of the notice of meeting containing the resolution to approve the other-means increase, of the following particulars:

      • (i) the numbers and percentages referred to in clause 5(b) of this schedule; and

      • (ii) the maximum percentage of all voting securities on issue that could be held or controlled by the specified shareholder after the other-means increase and on completion of all allotments under the specified transaction during the specified period; and

      • (iii) the maximum percentage of all voting securities on issue that could be held or controlled by the specified shareholder and the specified shareholder's associates after the other-means increase and on completion of all allotments under the specified transaction during the specified period; and

    • (c) a statement of the assumptions on which the particulars referred to in paragraph (b) are based.

    (3) If an other-means increase is approved by shareholders in accordance with this clause, the reference in clause 4 of this schedule to the approved maximum percentage must be taken to be a reference to the approved maximum percentage adjusted to take account of the other-means increase.

8 Change of control in specified shareholder
  • (1) During the specified period, there must be no change of control in a specified shareholder that results in another person becoming the holder or controller of an increased percentage of voting rights in Pharmacybrands unless the change of control in the specified shareholder—

    • (a) is by an acquisition of voting securities in the specified shareholder approved by an ordinary resolution of Pharmacybrands in accordance with rule 7(c) of the Code; or

    • (b) is by an allotment of voting securities in the specified shareholder approved by an ordinary resolution of Pharmacybrands in accordance with rule 7(d) of the Code; or

    • (c) is permitted under another exemption granted by the Panel.

    (2) If approval by Pharmacybrands’ shareholders is required under subclause (1)(a) or (b), the notice of meeting containing the resolution to approve the change of control must contain or be accompanied by the following information:

    • (a) a statement to the effect that the allotment of voting securities under the specified transaction during the specified period has been approved and a statement as to where a copy of the terms of the specified transaction may be obtained; and

    • (b) a statement, as at the date of the notice of meeting containing the resolution to approve the change of control, of the numbers and percentages referred to in clause 5(b) of this schedule; and

    • (c) a statement of the assumptions on which the particulars referred to in paragraph (b) are based.

9 No change to terms of specified transaction
  • During the specified period, there must be no change to the terms of the specified transaction other than a change required to comply with an enactment or the NZX Limited NZSX/NZDX Listing Rules.

Dated at Auckland this 24th day of July 2012.

The Common Seal of the Takeovers Panel was affixed in the presence of:

[Seal]

D O Jones,
Chairperson.


Statement of reasons

This notice applies to acts or omissions occurring on or after 3 August 2012 and expires on 31 December 2017.

The Takeovers Panel (the Panel) has granted—

  • an exemption from rule 16(b) and (d) of the Takeovers Code (the Code) to Pharmacybrands Limited (Pharmacybrands); and

  • an exemption from rule 7(d) of the Code to Cape Healthcare Limited (CHL) and LPL Trustee Limited (LPL) to the extent that that rule requires the notice of the meeting to vote on a resolution to approve the allotment of certain voting securities to CHL and LPL to comply with rule 16(b) and (d) of the Code.

Pharmacybrands proposes to declare a dividend in respect of Pharmacybrands’ 2012 financial year and to introduce, at the same time, a dividend reinvestment plan (DRP) for shareholders. Under the DRP, Pharmacybrands proposes to offer pro rata share allotments (DRP allotments) in Pharmacybrands to CHL and LPL under rule 7(d) of the Code during the approximate 5-year period expiring on 31 December 2017.

If the DRP is implemented, then CHL and LPL are likely to become the holders of an increased percentage of voting securities in Pharmacybrands. As both CHL and LPL already each hold more than 20% of the voting securities in Pharmacybrands, any increase in their voting rights as a result of the DRP allotments that does not comply with rule 7 of the Code would breach rule 6 of the Code. Accordingly, Pharmacybrands intends to seek shareholder approval for the DRP allotments.

However, Pharmacybrands is unable to provide the information that is required by rule 16(b) and (d) of the Code to be included in the notice of meeting for shareholder approval because of the period during which the DRP allotments will take place.

The exemptions relate to the disclosure of information in the notice of meeting for Pharmacybrands’ 2012 annual meeting relating to the particulars of voting securities to be allotted under the DRP and the issue price.

The exemptions are subject to conditions that ensure that the other shareholders in Pharmacybrands will be given sufficient information about the DRP and the DRP allotments to enable them to decide for themselves the merits of the proposal.

The Panel considers that it is appropriate and consistent with the objectives of the Code to grant the exemptions because—

  • it is not possible for Pharmacybrands to comply with rule 16(b) and (d) of the Code because of the period of time during which the DRP allotments will occur and the uncertainty of the potential dividend payouts:

  • other shareholders will be given sufficient information about the DRP and DRP allotments to enable them to decide for themselves the merits of the proposal:

  • other shareholders will have the opportunity to vote on the potential allotment of voting securities to CHL and LPL under the DRP allotments:

  • if the other shareholders approve the potential maximum allotments of voting securities to CHL and LPL, then, by implication, they can be taken to approve any lesser number and percentage of voting securities that is actually allotted under the DRP allotments during the period of this notice:

  • the number and percentage of voting securities that may be allotted to CHL and LPL under the DRP allotments are likely to be low, and therefore the costs of compliance with the Code would be disproportionate to the benefits.


Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 2 August 2012.

This notice is administered by the Takeovers Panel.