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05 June 2009
The Takeovers Panel has decided to convene a meeting under section 32 of the Takeovers Act to consider certain voting issues arising from the recent partial takeover made by a group of investment funds controlled by Mr David M Knott for 10.83% of the voting rights it did not hold in Rubicon Limited.
Partial offers that would result in the offeror holding or controlling 50% or less of the voting rights in the target company (as with the Knott/Rubicon takeover) cannot proceed without shareholder approval. Under rule 10 of the Takeovers Code the offer must be approved by a simple majority of those shareholders on the register at the time of the takeover offer that choose to vote either for or against the takeover. Voting rights held by the offeror or its associates are disregarded for this purpose.
The partial offer closed on 27 May 2009. Rubicon announced to the market that "... Over 80% of the company's shares (excluding those owned by Knott and Associates) were voted, and approximately 77% of those voted to approve the Offer...".
The Panel received a complaint about these voting figures from a Rubicon shareholder. In the course of investigating the complaint the Panel was advised that 45,460,950 shares (18.24% of total voting rights) owned by Knott Associates through various nominees had been voted in favour of the Rubicon takeover. It was submitted for Knott that the casting of these votes was made in error, was unintended, and was entirely inadvertent.
Rubicon announced to the market earlier today that it had become aware that shares controlled by Knott had been voted in favour of the Rubicon takeover. After disregarding those votes, 59% of Rubicon's total voting rights, excluding those controlled by Knott, had been cast, and there was still a majority (69%) of valid votes cast that approved of the offer.
The Panel considers that the casting of Knott's votes in favour of the takeover did not of itself constitute a breach of rule 10 of the Code. Once it became known that Knott's votes had been cast in favour of the offer Rubicon was able to disregard them and a majority of valid votes was still recorded in favour of the partial offer. For this reason the Panel agreed to allow the takeover to settle in accordance with the terms of the offer.
However, the Panel also considers that Knott Partners, and/or parties acting on Knott's behalf, by exercising, or instructing the exercise of, votes attaching to shares beneficially owned by Knott or Knott's associates in favour of the partial takeover, may have been engaging in conduct that may have been misleading or deceptive or may have been likely to mislead or deceive, in terms of rule 64 of the Takeovers Code
The Panel has convened a meeting to be held in Auckland on Wednesday 10 June 2009 to consider whether to exercise any of its powers under section 32 of the Takeovers Act 1993. The meeting will be a private meeting.