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15 December 2003
Ngai Tahu Holdings Corporation Limited (Ngai Tahu) has given notice of its intention to make a full takeover offer for all the shares it does not own in Shotover Jet Limited (Shotover). The offer is expected to be made on Friday 19 December 2003.
Ngai Tahu, with a holding of 88.3%, already has close to the 90% threshold required for it to become the dominant owner of Shotover. If Ngai Tahu reaches the 90% level it would then have 30 days from the day it becomes dominant owner, in which it must issue an "acquisition notice" under rule 54 of the Code. That notice must specify the consideration that Ngai Tahu would pay to outstanding security holders of Shotover for their shares.
The amount of consideration Ngai Tahu would have to pay can be determined in one of two ways:
Ngai Tahu has sought an exemption from the Panel to allow it to delay sending the acquisition notice until the earlier of:
The Panel is sympathetic to this request. It is consistent with proposals included in the Panel's discussion paper of April 2003 and with its recent recommendations to the Minister of Commerce for technical changes to the Code. However the Panel favours an exemption for Ngai Tahu that would mean that:
The Panel supports an exemption for Ngai Tahu, and a corresponding change to the Code, because the compulsory acquisition procedures in the Code do not work well when an offeror already has close to 90% of the shares in the target company when it makes its offer. If the offeror then reaches the 90% level very quickly it must issue its acquisition notice:
If the Panel does not grant Ngai Tahu the exemption sought there could be confusion for shareholders and unnecessary compliance costs for Ngai Tahu. On the other hand, the Panel would not grant an exemption that would remove the need for Ngai Tahu to have to achieve acceptances of 50% of the shares under offer, before it could compulsorily acquire the outstanding shares at its offer price, and with no right of shareholders to object.
If sufficient shareholders resist Ngai Tahu's offer and thus require Ngai Tahu to pay a compulsory acquisition price that is certified as fair and reasonable by an independent adviser, that right would not be denied them. However, the compulsory acquisition process would not start until after the offer had closed.
Ngai Tahu's offer is to be made on Friday 19 December 2003 so the Panel needs to settle the terms of any exemption before that date. The Panel welcomes any comments from interested parties on its possible exemption for Ngai Tahu. These should be received by the Panel by 4.00 p.m. on Wednesday 17 December 2003.
Comments should be sent by facsimile letter to 04 471 4619 or by email to email@example.com . Respondents should indicate their interest in the matter, in particular if they are a current shareholder of Shotover.