Dairy Brands New Zealand Limited


Transaction Type: Company meeting (Share buyback)

Acquirer: ASC Trust Company Limited

Independent Adviser(s): Ferrier Hodgson (Rule 18)

Date of meeting: 2/12/2002

Exemption: Class Exemptions


On 11 October 2002, Dairy Brands New Zealand Limited (Dairy Brands) proposed to return capital to shareholders by undertaking a buyback of its ordinary shares at $0.64 per share from all shareholders. Dairy Brands had conducted a share buyback in 2001 at $0.70 per share to return surplus funds as capital to shareholders after having sold their seven remaining farms.

The major shareholder of Dairy Brands, ASC Trust Company Limited (ASC), controlled 36.3% of the shares in Dairy Brands at the time. As ASC would not be participating in the proposed buyback, it would hold 100% of the shares in Dairy Brands if all remaining shareholders accepted the buyback. Accordingly, Dairy Brands was required to obtain shareholder approval for the buyback in accordance with clause 4 of the Takeovers Code (Class Exemption) Notice 2001 so that ASC could maintain its current shareholding without breaching the Code. The proposed buyback also had to comply with rule 7(c) of the Code. 

On 2 December 2002, shareholders approved the proposed buyback as well as voted to permit ASC and other non-participating shareholders to rely on the Class Exemption. 

Ferrier Hodgson prepared a rule 18 independent adviser’s report on the merits of the proposed acquisition.