Bridgecorp and King give enforceable undertakings to sell shares and cancel agreements

 

24 September 2004

The Panel has accepted enforceable undertakings from Bridgecorp Capital Limited, Bridgecorp Holdings Limited, Brent King and Snowdon Peak Investments Limited made under section 31T of the Takeovers Act relating to Dorchester Pacific Limited and involving:

    • the compulsory sell-down of shares in Dorchester Pacific Limited,
    • the immediate cancellation of various agreements, and
    • a standstill of further acquisitions of Dorchester Pacific Limited shares until 30 June 2005 except through code-compliant offers.

The Panel regards these undertakings as a satisfactory and expeditious means of remedying the non-compliance with the Takeovers Code of Bridgecorp and King.

Through a series of contracts executed on 13 August 2004 Bridgecorp Capital Limited acquired 19.99% of Dorchester Pacific Limited from Brent King and the interests of Grant Baker, and obtained certain rights over a further 5.05% of Dorchester Pacific shares held by King under a so called "lock-up" deed. Brent King subsequently purchased further Dorchester Pacific shares from the Vink family.

On 8 September 2004 the Panel determined, after holding a meeting under section 32 of the Takeovers Act, that it was not satisfied that Bridgecorp Capital had acted in compliance with the Takeovers Code when it acquired its Dorchester Pacific shares because Bridgecorp was an associate of King who also held shares and in aggregate they held more than 20% of the Dorchester Pacific share capital.

The Panel also determined that it was not satisfied that Brent King had complied with the Code when he acquired shares from the Vink family on 16 August 2004 because of his association with Bridgecorp and their aggregate holding of more than 20% of the Dorchester Pacific share capital.

In essence Bridgecorp and Bridgecorp Holdings have undertaken to:

    • take all necessary steps to cancel the "lock-up" deed between Bridgecorp, Brent Douglas King and Snowdon Peak by 29 September 2004;
    • sell 1,056,874 Dorchester Pacific shares within 60 days through a process approved by the Panel so that neither Mr King, Snowdon Peak, the Vink family, Grant Keith Baker, nor their associates, or associates of Bridgecorp or Bridgecorp Holdings, will hold or control those shares;
    • not exercise the voting rights attached to those shares before they are sold;
    • take all necessary steps to cancel, by 29 September 2004, the clauses in the sale and purchase agreement between Bridgecorp and Mr King relating to obligations extending beyond the completion of the share sale;
    • not increase their aggregate control percentage in Dorchester Pacific above 14.95%, other than in accordance with an offer that complies with the Code (which cannot be made before the compulsory sell-down has been completed) until after 30 June 2005;
    • not obtain any additional relevant interest in any Dorchester Pacific securities, other than in accordance with an offer that complies with the Code, until after 30 June 2005.

In essence Brent Douglas King on his own behalf and on behalf of Snowdon Peak has undertaken that he will:

    • take all necessary steps to cancel the "lock-up" deed he entered into with Bridgecorp and Snowdon Peak and to repay Bridgecorp the $600,000 fee, by 29 September 2004;
    • ensure that Snowdon Peak sells within 30 days the 183,740 Dorchester Pacific shares purchased from the Vink family, through a process approved by the Panel, so that neither Bridgecorp, Bridgecorp Holdings, the Vink family, Grant Keith Baker, nor their associates, or associates of Snowdon Peak or Brent King, will hold or control those shares;
    • not exercise, nor permit Snowdon Peak to exercise, the voting rights attached to those Dorchester Pacific shares before they are sold;
    • take all necessary steps to cancel, by 29 September 2004, clauses in the sale and purchase agreement he made with Bridgecorp relating to obligations extending beyond the completion of the share sale;
    • not increase the aggregate control percentage in Dorchester Pacific held by him and the companies he controls above 5.05% other than in accordance with an offer that complies with the Code (which cannot be made until the compulsory sell-downs have been completed) until after 30 June 2005;
    • not obtain, and ensure that companies he controls do not obtain, any additional relevant interest in any Dorchester Pacific securities other than in accordance with an offer that complies with the Code until after 30 June 2005.