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18 July 2002
On 27 June 2002 the Takeovers Panel determined that the "in concert" purchase of 55.98% of Seafresh shares by Kooiman Investments Limited, Ms Kate Foot, Mr Bruce McCullough and Pisces Holdings Limited (the buyers), did not comply with the Takeovers Code.
By not complying with the Code the buyers had denied Seafresh shareholders the right to vote on the merits of the acquisition or to receive an offer at the same price. The Panel proposes to restore the shareholders' right to vote on the transaction. To achieve this the Panel has invited the buyers to apply for an exemption from the Code which would be expressed to be conditional on the approval of a meeting of the non-interested Seafresh shareholders.
The terms of the exemption are likely to include conditions requiring that:
The Panel believes, where possible, it should be for the shareholders to decide the appropriateness of the acquisition. If approval is not given by the non-interested shareholders, the buyers will remain outside of compliance with the Code. If that were to occur, the Panel would take such action as it considered appropriate. This may include applying to the Court for a pecuniary penalty or forfeiture of shares.
The Panel has taken the approach it has because the buyers' non-compliance with the Code appears to have arisen from a misunderstanding of the Code rather than an active attempt to avoid compliance.
In addition, and given the seriousness with which the Panel views non-compliance with the Code, the Panel has, as it is entitled to do, imposed costs on the buyers arising from holding its section 32 meeting, for the Panel's full fees and costs of some $40,000.
The Panel emphasises that care should be taken when interpreting provisions of the Code and in particular the fundamental rule contained in rule 6.