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6 August 2003
The Takeovers Panel met on Monday 4 August 2003 at the request of Infratil Limited to consider whether Toll Group (NZ) Limited (Toll) complied with rule 38 of the Takeovers Code by entering into an agreement (Toll/Crown agreement) with the Crown in relation to Tranz Rail Holdings Limited (Tranz Rail) on 7 July 2003. Representatives of Toll, Tranz Rail and Infratil attended the meeting.
Rule 38 of the Code is concerned with defensive tactics by the directors of a code company which has received a takeover offer or who believe a bona fide offer is imminent.
Under the Toll/Crown agreement the parties agreed that:
Infratil Limited, a Tranz Rail shareholder alleged that, in contravention of rule 38:
Rule 38 of the Code refers specifically to action taken or permitted by the directors of the target company, in this case Tranz Rail. The Panel decided that Toll was not acting as or on behalf of the directors of Tranz Rail, by entering into the Agreement with the Crown. As the Toll/Crown Agreement did not result from any action taken or permitted by the directors of Tranz Rail, it could not be considered a defensive tactic under rule 38.
Accordingly the Panel determined that Toll had not breached rule 38 of the Code by entering into the Toll/Crown agreement.
The full text of the Panel's determination is available on the Panel's web-site atwww.takeovers.govt.nz