Takeovers Panel's Reasons for Dorchester Decision

 

14 September 2004

The Takeovers Panel has today released its statement of reasons for the determination made on Wednesday 8 September relating to acquisitions in Dorchester Pacific Limited.

The determination was that the Panel was:

    • not satisfied that Bridgecorp Capital Limited and its controlling shareholder Bridgecorp Holdings Limited acted in compliance with the Takeovers Code when it acquired 19.99% of the voting rights of Dorchester Pacific Limited from Brent Douglas King and others on or about 13 August 2004; and
    • not satisfied that Brent Douglas King acted in compliance with the Takeovers Code when he acquired voting shares in Dorchester Pacific Limited from Alexander Eric Vink and Natasha Maree Vink during the period 12 August 2004 to 16 August 2004.

The Panel has found that Bridgecorp and King were associates at the time of both acquisitions and following the acquisitions Bridgecorp and King and their associates held in aggregate 25.9% of the voting rights of Dorchester. This is in excess of the 20% permitted by the Code.

The grounds on which the Panel found Bridgecorp and King to be associates were:

  • The terms of the so-called lock-up deed made between Bridgecorp and King, which related to just over 5% of Dorchester shares. In effect this was a freeze plus an option over King's shares for a period of 10 months in exchange for $600,000; and
  • the provisions of the sale and purchase agreement which contained obligations extending beyond the completion of the sale; and
  • a range of surrounding circumstances detailed in the Panel's decision.

The Panel has held over the issue of remedies for further consideration. Meanwhile the restraining orders made on 30 August 2004 and continued on 8 September 2004 remain in place.

The full text of the Panel's statement of reasons is on the Panel's website at www.takeovers.govt.nz