Statement of reasons

This notice applies to acts or omissions occurring on or after 27 April 2004.

The Takeovers Panel has exempted Rubicon Forests Limited (Rubicon) from compliance with rules 43(5); 28(1)(a), and 45(1) of the Takeovers Code (the Code) to the extent that its partial takeover offer for Tenon Limited (Tenon) relates to shareholders whose addresses on the Tenon securities register are in the United States of America.

Under rule 43 of the Code, Rubicon is required to send the offer document, within a prescribed time frame, to every person who is registered as a holder of Tenon shares on the record date.

Approximately 140 people, together holding 0.11% of the total Tenon shares on issue, are shown on the Tenon securities register as having an address in the United States of America (United States shareholders). The Panel has been advised by Rubicon that if the ( offer document is sent to the United States shareholders, Rubicon will need to comply with certain requirements of United States law regarding takeover offers.

The exemption from rule 43(5) of the Code allows Rubicon not to send the offer document to the United States shareholders. However, United States shareholders will be sent a copy of the target company statement and accordingly will be aware of the offer and will be able to take steps to participate in the offer.

The exemptions from rules 28(1)(a) and 45(1) of the Code are necessary as a consequence of the exemption from rule 43(5) of the Code. Rule 28(1)(a) requires notification of variations of an offer to be sent to all offerees. The exemption allows Rubicon not to send a variation of the partial offer to the United States shareholders. Rule 45(1) of the Code requires confirmation that the offer has been sent to all offerees to be sent to the target company, the registered exchange, and the Registrar of Companies. The exemption instead requires Rubicon to send confirmation that the offer has been sent to all offerees other than United States shareholders.

The Takeovers Panel considers that it is appropriate to grant the exemptions from rules 43(5), 28(1)(a), and 45(1) of the Code for the following reasons:

• •the number of shareholders with registered addresses in the United States of America, and the extent of their shareholding in Tenon, is minimal; and

• •the cost of complying with United States law would be out of proportion to the number of shareholders affected and the extent of their shareholding; and

• •shareholders with registered addresses in the United States of America will be aware of the offer and will be able to take steps to participate in the offer.

The Takeovers Panel considers that the exemptions are consistent with the objectives of the Code because it is important for the promotion of competition for the control of code companies that offerors are not required to incur significant costs of complying with the laws of an overseas jurisdiction in circumstances where that requirement is caused by a minimal number of shareholders, holding a minimal number of shares, in that jurisdiction.