Statement of reasons

This notice applies to acts or omissions occurring on or after 15 September 2005.

The Takeovers Panel has granted exemptions—

• •from rule 7(d) of the Takeovers Code (the Code) in respect of the requirements for a notice of meeting under rule 16(b) of the Code to each of the following (the underwriters):

  • •Aspiring Asset Management Limited:

  • •David John Smallbone:

  • •De Tourettes Holdings Limited:

  • •John McDonald Paterson:

  • •PKHB Holdings Limited:

  • •Southern Viticulture Limited:

  • •Trevor Donald Scott, Christopher John Swann, and David Houghton Wale as trustees of the T D Scott No 2 Family Trust; and

• •from rule 16(b) of the Code to Botry-Zen Limited (Botry-Zen).

Botry-Zen intends to make a renounceable pro rata 1 for 1 rights issue of 76 666 666 ordinary shares to its existing shareholders (the issue). It is proposed that the issue will be partially underwritten by each underwriter separately agreeing to underwrite a percentage of any of the shortfall resulting from the issue. Two of the underwriters (namely, Southern Viticulture Limited and PKHB Holdings Limited) are also current shareholders of Botry-Zen and they may, like all the other shareholders, participate in the issue.

If each underwriter were required to take up the maximum number of shares that that underwriter could be required to subscribe for under that underwriter's underwriting agreement, then in aggregate the underwriters would together be allotted more than 20% of the voting rights in Botry-Zen. Accordingly, Botry-Zen intends to obtain shareholder approval, in accordance with the Code, for the potential allotment of shares to the underwriters under the underwriting agreements. However, Botry-Zen cannot comply with rule 16(b) of the Code before completion of the issue because it cannot state in the notice of meeting—

• •the exact number of shares that would be allotted to each underwriter and to all of the underwriters:

• •the exact percentages of the aggregate of all existing voting securities and all voting securities being allotted that the number of shares represent:

• •the exact percentages of voting securities in Botry-Zen that each underwriter and all of the underwriters may hold or control after the allotment.

These details would be known only after the issue had been completed and all the allotments made.

The Takeovers Panel considers that it is appropriate to grant the exemptions because—

• •it is impossible for the actual number of shares to be allotted and the relevant percentages required by rule 16(b)(i), (ii), and (iii) to be stated in the notice of meeting, as these numbers and percentages are dependent on the level of participation by Botry-Zen's shareholders in the issue:

• •if Botry-Zen's shareholders approve the allotment of shares to each underwriter under that underwriter's underwriting agreement and the maximum possible percentage of voting rights that may be held or controlled by each underwriter and by all of the underwriters, then by implication the shareholders also approve any lesser percentage of voting rights that may be held or controlled by each individual underwriter and by all of the underwriters following the allotment of the shares:

• •pro rata rights issues and underwriting agreements are accepted means of raising equity capital in New Zealand, so the Takeovers Panel should facilitate these arrangements by granting appropriate exemptions where necessary.

The Takeovers Panel considers that the exemptions in this notice are consistent with the objectives of the Code because the non-associated shareholders of Botry-Zen will have an opportunity to vote on the allotment of voting securities to the underwriters.