Otago Power Limited
Transaction Type: Takeover (Full)
Offeror: Bluesparks Limited, Lightswitch Limited, Powersurge Limited and Shockwave Limited One Otago Limited/Dunedin Electricity
Independent Adviser(s): Grant Samuel & Associates (Rule 21)
Offer commencement date: 8/05/2002
On 8 May 2002, Bluesparks Limited, Lightswitch Limited, Powersurge Limited and Shockwave Limited (Bluesparks & Others), being companies jointly owned by Electricity Invercargill Limited and The Power Company Limited, made a joint full takeover offer for all the shares in Otago Power Limited (OPL). The offer to OPL shareholders was at $3.10 per share.
On 11 May 2002, One Otago Limited (OOL), a subsidiary of Dunedin Electricity, gave notice of its intention to purchase all of the shares in OPL at the price of $3.10 per share.
On 22 May 2002, Bluesparks & Others sent out an offer of $3.25 per OPL share to nine of OPL’s largest shareholders, provided all nine shareholders accepted the offer. OOL responded with an increased offer for the first 20% of OPL acceptances at $3.25 per share.
The Panel formed the view that the offer to the nine recipients constituted a variation of the Code offer made without complying with rules 27 – 29 of the Code. The Panel accepted Bluesparks & Others’ assurances that there had been no intention to breach the Code, and noted that the action had failed.
On 29 May 2002, the Panel determined that it was not satisfied that OPL had acted, was acting, or intended to act in compliance with the Code by distributing to the shareholders of OPL, for the purposes of the meeting on 6 June 2002, a resolution purporting to have the shareholders approve the actions taken by those directors since 27 February 2002 up to and beyond 6 June 2002 to the extent that the directors’ actions constituted defensive tactics in terms of rules 38 or 39 of the Code. The Panel also considered that OPL, by sending the resolution to shareholders may not, to the extent that it was purporting to approve prospective actions by OPL, have complied with rule 40 of the Code.
On 10 June 2002, OOL announced that its 20% offer was completed and made an offer to purchase the remaining shares in OPL at $3.15 per share. The offer was to close on 11 July 2002.
On 12 June 2002, OPL announced that its business and assets had been sold to a consortium comprising Electricity Invercargill Limited, The Power Company Limited and Marlborough Lines.
On 20 June 2002, the Panel granted consent to OOL to withdraw its offer for OPL under rule 26(1) of the Code.
On 20 June 2002, the Panel also consented under rule 26(1) of the Code to the withdrawal of the offer dated 8 May 2002 from Bluesparks and Others on the basis that the asset sale was unconditional. The Panel formed the view that the offer was effectively redundant given the success of the asset sale process, and that granting consent would not prejudice any shareholder or party to the offer.
Grant Samuel & Associates prepared a rule 21 independent adviser’s report on the merits of the proposed allotment.