Panel Welcomes Oyster Bay Decision


28 November 2005

The Takeovers Panel has welcomed the High Court's decision to cancel the partial takeover offer of Oyster Bay Marlborough Vineyards Limited by Delegat's Wine Estate Limited.

The Panel said it was pleased that Justice Miller had endorsed the Panel's recommendation to cancel the Delegat's offer. This recommendation had been made because of the cumulative effect of two main omissions from the target company statement.

The first omission was the lack of any reference to information relating to the difference between the encumbered and unencumbered values of Oyster Bay's vineyards. This was the basis for the Panel's original finding on 20 September 2005 that Oyster Bay had not complied with the Code.

The second omission came to prominence at the time of the Court's hearing on 9 November 2005. It concerned the absence of information about June 2005 valuations of Oyster Bay's vineyard properties prepared by Logan Stone Limited. These valuations were supplied to Oyster Bay on 11 July 2005, 8 days before the target company statement was signed.

Ferrier Hodgson & Co, which prepared the independent adviser's report, told the Panel that this information would have changed its assessment of the Delegat's offer including reviewing its primary valuation of the company. This advice led the Panel to recommend cancellation of the offer rather than its earlier approach of distributing a corrective statement to accepting shareholders and giving them the right to revoke their acceptances.

Justice Miller agreed with the Panel that these omissions were material to the takeover process and meant that cancellation of the Delegat's takeover was appropriate.