Takeovers Panel Considered Non-payment of Abano Expenses

11 July 2008

The Takeovers Panel met on 30 June 2008 under section 32 of the Takeovers Act in relation to a complaint made to the Panel by Abano Healthcare Group Limited (Abano) that a breach of the Code had occurred by reason of the alleged failure by Crescent Capital Partners Limited (Crescent) to pay to Abano a number of Abano's "properly incurred" costs in respect of Crescent's unsuccessful takeover offer for Abano made in December 2007.

On Friday 27 June 2008 the Panel was informed that Abano had reached a private settlement with Crescent in relation to reimbursement by Crescent of the outstanding takeover costs and that the parties did not want the meeting to proceed. The Panel considered that the question of compliance with rule 49(2) was not necessarily resolved by the settlement and that the question of compliance with rule 49(2) in this case was still at large. However, given that settlement, the Panel decided that a pragmatic approach should be taken. Accordingly, no determination was made by the Panel at its meeting as to whether Crescent had failed to comply with the Code.

The Panel will make an order that Abano should pay the Panel's costs for calling the meeting in accordance with the Takeovers (Fees) Regulations 2001.

The complaint raised a number of important questions of principle in respect of the application of rule 49(2) of the Takeovers Code. To assist the market the Panel intends to release a guidance note on the application of rule 49(2) in the near future.

A copy of the Panel's decision is available on the Panel's website at: www.takeovers.govt.nz