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26 November 2004
The Panel has today declined an exemption application from Vector Limited in respect of its proposed takeover offer for all the shares in NGC Holdings Limited (NGC).
The exemption sought related to the consideration to be offered to NGC shareholders. The consideration proposed to be offered comprises a cash price of $2.91 per share plus a preferential entitlement to an allocation of Vector shares in the event that Vector makes a public offering of its shares. Vector asked for approval to offer the preferential entitlement to all NGC shareholders other than The Australian Gas Light Company (AGL), NGC's major shareholder.
Differential offers of this type are not permitted under the Code. Rule 20 requires an offer to be made on the same terms and provide the same consideration to all shareholders of the same class.
The effect of the exemption sought would have been to permit a takeover offer to be made in a manner which would be inconsistent with this fundamental tenet of the Code. The Panel considered that this would be inappropriate since its statutory power to grant exemptions from the Code extends only to departures from the specific provisions of the Code which are nevertheless consistent with the objectives of the Code.
The Panel's decision not to grant the exemption does not prevent Vector from offering the preferential entitlement to Vector shares under a public offer to all shareholders, including AGL, as part of the consideration under its takeover offer.