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31 July 2003
The Takeovers Panel will hold a meeting in relation to the underwriting by Guinness Peat Group plc (GPG) of the existing pro rata cash offer being made by Tower Limited (Tower) to its shareholders.
GPG is committed to underwriting the issue. By meeting its underwriting obligations GPG's holding of voting securities in Tower could exceed 20% of Tower's total voting rights.
The Panel granted GPG an exemption that would enable it to obtain in excess of 20% of the voting rights in Tower as a result of fulfilling its underwriting obligations, subject to selling down its excess shares within a period being the shorter of 30 days or the date of Tower's next shareholders' meeting.
GPG has stated that it is entitled to rely on clause 19 of the Takeovers Code (Class Exemptions) Notice (No 2) 2001 (the class notice). This notice provides a sell-down period of 6 months for any excess shares. However to rely of clause 19 of the class notice GPG must be an "underwriter" obtaining voting securities under a bona fide underwriting contract entered into in the underwriter's ordinary course of business.
The Panel considers that GPG may not be entitled to rely on the exemption in clause 19 of the Class Notice.
On 25 July the Panel was served with High Court proceedings by GPG. These sought a judicial review of what GPG contended was a Panel decision to deny GPG the ability to rely on the class notice.
GPG sought further orders quashing that part of the GPG exemption which required the sell-down of any shares in excess of 20% of the voting rights in Tower within the shorter period of one month or the next shareholders' meeting.
The Panel has not made any final decision on whether GPG is entitled to rely on the exemption in clause 19 of the class notice and has called the meeting under section 32 of the Takeovers Act 1993 to determine the issue.
The Panel has decided not to issue any restraining orders.
The meeting will be held at 10.00am on Thursday 7 August 2003 in Auckland. The meeting will be a private meeting.