Panel exemption for Rubicon Forests Limited


26 April 2004

On 26 April 2004 the Panel granted an exemption to Rubicon Forests Limited from compliance with rule 43(5) of the Takeovers Code in relation to a partial takeover offer for Tenon Limited.

Under rule 43(5) of the Code, Rubicon is required to send the offer document, within a prescribed timeframe, to every person who is registered as a holder of Tenon shares on the record date.

Approximately 140 people, together holding 0.11% of Tenon shares, are shown on the share register as having an address in the United States of America. The Panel has been advised by Rubicon that if the offer document is sent to shareholders whose addresses on the share register are in the United States Rubicon will need to comply with certain aspects of United States law regarding takeover offers. The cost of complying with United States law in respect of the relevant United States shareholders would be out of proportion to the number of shareholders affected and the extent of their shareholding.

The exemption allows Rubicon to not send the offer document to shareholders whose addresses on the Tenon securities register are in the United States of America. However, those 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.

When considering the exemption the Panel noted that a significant number of Tenon shares may be controlled, although not directly held, by people in the United States of America. The Panel notes that the Code does not require bidders to make or send an offer to any person not shown as a holder of securities in the target company on the securities register of that company.

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

The Panel has granted an exemption from rules 28(1)(a) and 45(1) dealing with various notices required by the Code. Exemption from those rules was necessary as a consequence of the exemption from rule 43(5).