Takeovers Panel finds that Oyster Bay has contravened the Code


22 September 2005

The Takeovers Panel met on 20 September 2005 to consider complaints by Peter Yealands Investments Limited and Mr David Rankin about the target company statement issued by Oyster Bay Marlborough Vineyards Limited in response to Delegat's Wine Estate Limited's partial takeover offer of 7 July 2005. That offer closed on 19 September 2005.

The Panel is not satisfied that Oyster Bay complied with the Code in that the target company statement omitted information about the market value, encumbered and unencumbered, of Oyster Bay's freehold and leasehold vineyards that could reasonably have been expected to be material to decisions by Oyster Bay's shareholders to accept or reject Delegat's offer.

The Panel made several orders:

  • restraining Delegat's from acquiring securities in Oyster Bay or any interest in or rights relating to such securities;
  • continuing to direct Delegat's not to declare its offer unconditional; and
  • continuing to direct Oyster Bay not to register the transfer or transmission of any securities arising from acceptance of the Delegat's offer.

These restraining orders expire at the close of 13 October 2005 but can be revoked or amended prior to their expiry.

Delegat's has a high level of acceptances of its partial offer. The Panel's preferred outcome is that Oyster Bay shareholders who have accepted Delegat's offer be given the opportunity to reconsider their decision before the takeover transaction is finally concluded. This will require certain actions by Delegat's and Oyster Bay.

The process for giving those shareholders this opportunity should be finalised and announced within the next week.

As an indication to the market, the Panel expects this process would take a little over a month. Shareholders who have accepted the Delegat's offer would be sent an additional statement by Oyster Bay's independent directors, approved by the Panel, providing the information that was omitted from the target company statement.

Shareholders could either revoke their acceptances of the Delegat's offer or let their acceptances stand. Shareholders would have around three weeks to consider the new information. The final outcome of the takeover would be decided at the end of the process.

The Panel is prepared to amend its restraining orders, to grant exemptions from the Code, and to accept enforceable undertakings from Oyster Bay and Delegat's (and others if appropriate) to facilitate this approach.

A copy of this determination (without supporting reasons) and the restraining order is published on the Panel's website. The Panel will issue reasons for its determination as soon as possible.