Takeovers Panel releases Horizon Energy decision

10 May 2010

The Takeovers Panel met on 22 March 2010 to consider three issues arising from the unsuccessful takeover offer made in September 2009 by Marlborough Lines Limited (Marlborough Lines) which had bid for 51% of the voting shares of Horizon Energy Distribution Limited (Horizon Energy), an electricity distribution company based in Whakatane. The meeting was held at the request of Marlborough Lines.

The issues considered by the Panel related to the revised profit forecast issued by Horizon Energy on 28 September 2009, the day before Marlborough Lines made its takeover offer, and to a statement in Horizon Energy's target company statement about the directors' view of the value of the company. The question in each case was whether Horizon Energy's statements were misleading or deceptive or were likely to mislead or deceive.

The Panel determined that:

  • Horizon Energy did not breach the provisions of the takeovers code when issuing its revised profit outlook on 28 September 2009 insofar as it related to the overall amount of the increased forecast profit;
  • Horizon Energy did breach the provisions of the Code by omitting to disclose that a material part of the increased profit outlook had come about from a change to the accounting treatment of internally constructed assets;
  • The directors of Horizon Energy did not breach the provisions of the Code when they stated in the target company statement that they assessed the company to be worth more than the value range for Horizon Energy expressed by the independent adviser in its report for shareholders.

The Panel does not intend to take any further action in relation to Marlborough Lines' complaints other than to make orders in relation to the payment of its costs.

The full text of the Panel's determination is available on the Panel's website atĀ www.takeovers.govt.nz