1

Title
This notice is the Takeovers Code (Mascot Finance Limited) Exemption Notice 2008.

2

Application

(1)

Clauses 7 and 8 apply to acts or omissions occurring on or after 14 August 2008.

(2)

The rest of this notice applies to acts or omissions occurring on or after 30 September 2002.

3

Expiry

This notice expires on the close of 1 July 2011.

4

Interpretation

(1)

In this notice, unless the context otherwise requires,—  
Act means the Takeovers Act 1993
Code means the Takeovers Code under the Act
historical transactions means the transactions described in Schedule 1
Mascot means Mascot Finance Limited
redeemable preference shares means the 3 858 000 Class A redeemable preference shares issued by Mascot in March 2002
specified shareholders means the persons specified in Schedule 2
voting securities means voting securities in Mascot.

(2)

In this notice, a reference to a person increasing voting control is a reference to the person becoming the holder or controller of an increased percentage of the voting rights in Mascot.

(3)

Any term or expression that is defined in the Act or the Code and used, but not defined, in this notice has the same meaning as in the Act or the Code.

5

Exemption from rule 6(1) of Code in respect of historical transactions

Each of the persons specified in Schedule 1 is exempted from rule 6(1) of the Code in respect of any increase in the person's voting control as a result of the historical transactions.

6

Condition of exemption in respect of historical transactions

The exemption in clause 5 is subject to the condition that the specified shareholders unanimously consent in writing, on or before 31 August 2008, to all increases in voting control as a result of the historical transactions.

7

Exemption from rule 6(1) of Code in respect of future transactions

(1)

Each of the specified shareholders is exempted from rule 6(1) of the Code in respect of any increase in the specified shareholder's voting control as a result of—

1. any acquisition of voting securities by Mascot that occurs on or after 14 August 2008; or
2. any acquisition by a specified shareholder of voting rights in Mascot that are held or controlled by another specified shareholder that occurs on or after 14 August 2008.

(2)

Subclause (1) does not apply to an acquisition that occurs after the date on which Mascot converts any redeemable preference shares into ordinary shares (being a conversion that occurs on or after 14 August 2008).

8

Conditions of exemption in respect of future transactions

The exemption in clause 7 in respect of a particular acquisition is subject to the conditions that,—

1. before the acquisition occurs, the specified shareholders who, immediately before the acquisition, hold or control voting securities unanimously consent in writing to any proposed increase in the voting control of a specified shareholder as a result of the acquisition:
2. a valuation of Mascot as at, or as at about, the time that an offer is made in respect of the acquisition is undertaken by an independent valuer appointed by the board of Mascot, and a copy of that valuation is given to each of the persons who are required to give their consent under paragraph (a) before that consent is given.

Schedule 1
Historical transactions

Schedule 2
Specified shareholders

Dated at Wellington this 12th day of August 2008.

The Common Seal of the Takeovers Panel was affixed in the presence of:

This notice (apart from clauses 7 and 8) applies to acts or omissions occurring on or after 30 September 2002.  Clauses 7 and 8 apply to acts or omissions occurring on or after 14 August 2008.  The notice expires on the close of 1 July 2011.

The Takeovers Panel (the Panel) has granted to certain specified persons a retrospective exemption from rule 6(1) of the Takeovers Code (the Code) in respect of any increase in those persons’ voting control in Mascot Finance Limited (Mascot) as a result of certain specified historical transactions.  The exemption is subject to a condition that requires all of the current Mascot ordinary shareholders to unanimously consent in writing to the increases in voting control.

Mascot is a Code company by virtue of having 50 or more shareholders.

Mascot has issued redeemable preference shares to members of the public (the redeemable preference shares).  Although the redeemable preference shares are not voting securities for the purposes of the Code, the holders of those redeemable preference shares are considered to be shareholders for the purposes of the Code.  The total number of redeemable preference shareholders together with voting security holders (ordinary shareholders) is greater than 50.

Mascot has 19 ordinary shareholders (the current Mascot ordinary shareholders, all named in Schedule 2), all of whom are considered associates for the purposes of the Code.  Some of those persons are directors and senior employees of Mascot.  The largest shareholder holds or controls about 82% of the voting rights in Mascot.  The current Mascot ordinary shareholders are all party to shareholders’ agreements.

Between September 2002 and March 2007 a number of transactions were undertaken that resulted in the current Mascot ordinary shareholders increasing their respective control percentages in Mascot.
These increases in voting control appear to have resulted in inadvertent breaches of the Code.  These transactions include buybacks by Mascot of its own voting securities, bonus issues of voting securities, trading in voting securities amongst ordinary shareholders, and transfers of voting securities by certain shareholders to family trusts or holding companies controlled by those shareholders.  Some of the persons involved in the breaches of the Code have since exited the company.

The Panel considers it appropriate to grant the exemption and that the exemption is consistent with the objectives of the Code because―

• Mascot is a Code company only by virtue of having issued the redeemable preference shares; and
• the historical breaches of the Code by Mascot’s ordinary shareholders appear to have been inadvertent; and
• the usual Code procedure for approving increases in a person’s voting control is unworkable in Mascot’s circumstances because all of the ordinary shareholders are considered to be associates for the purposes of the Code; and
• all affected shareholders have an opportunity to unanimously approve in writing all increases in voting control that occurred in breach of the Code.  The affected shareholders will not be disadvantaged by not having all of the information and certifications required by the Code because of the proximity of the current Mascot ordinary shareholders to the business of the company and the availability of information from other sources.

The Panel has also, in clause 7, granted to the current Mascot ordinary shareholders an exemption from rule 6(1) of the Code in respect of any increase in any one of those person’s voting control in Mascot as a result of—

• any future acquisition by Mascot of its own voting securities; or
• any future acquisition by the person of voting rights held or controlled by any other current Mascot ordinary shareholder.

The exemption is subject to the conditions that—

• the current Mascot ordinary shareholders unanimously consent in writing to any proposed increase in the voting control of a current Mascot ordinary shareholder as a result of the future acquisition; and
• a valuation of the company is undertaken by an independent valuer appointed by the board of Mascot, and a copy of that valuation is provided to each of the current Mascot ordinary shareholders in advance of the written consent given in accordance with the above condition.

The current Mascot ordinary shareholders wish to be able in the future to have the company buy back their voting securities and also to be able to acquire more voting securities from any other of the current Mascot ordinary shareholders.  In the absence of an exemption, such transactions would be impossible because the Mascot ordinary shareholders cannot comply with the relevant provisions of the Code.
The Panel considers it appropriate to grant the exemption and that the exemption is consistent with the objectives of the Code because―

• Mascot is a Code company only by virtue of having issued the redeemable preference shares; and
• the usual Code procedure for approving increases in a person’s voting control is unworkable in Mascot’s circumstances because all of the ordinary shareholders are considered to be associates for the purposes of the Code; and
• all affected shareholders have an opportunity to unanimously approve in writing all increases in voting control as a result of the acquisition by Mascot of its own voting securities or by a current Mascot ordinary shareholder acquiring more voting securities from any other of the current Mascot ordinary shareholders.  The affected shareholders will not be disadvantaged by not having all of the information and certifications required by the Code because of the proximity of the current Mascot ordinary shareholders to the business of the company and the availability of information from other sources.