About the Panel

The Takeovers Panel (the Panel) is seeking expressions of interest from relevant persons who wish to be considered for appointment as an independent expert to determine the fair and reasonable value of shares in Rural Equities Limited (REL) for the purpose of the compulsory acquisition provisions under the Takeovers Code (the Code).

On 18 December 2024, H & G Limited (H&G) made an offer under the Code to purchase all of the fully paid ordinary shares (REL Shares) in REL not already held by H&G (the Offer).

On 29 January 2025, following the acquisition of certain REL Shares under the Offer, H&G gave notice that:

(a)    it had become the dominant owner of REL for the purposes of the Code; and

(b)   it was exercising its compulsory acquisition rights under Part 7 of the Code to acquire the outstanding REL Shares, specifying an acquisition price of $6.65 per REL Share (being the Offer price).

H&G has received written objections to the $6.65 acquisition price from shareholders who together hold 10% or more of the outstanding REL Shares.

H&G is therefore required, under rule 57(3) of the Code, to refer to expert determination the amount of the consideration to be provided for the outstanding REL Shares. Under rule 58, the independent expert is to be appointed by the Panel, although H&G must pay the costs of the expert determination.

Rule 57(3) provides that the amount of the consideration must be a cash sum equal to the fair and reasonable value of the REL Shares. Rule 57(4) of the Code requires the fair and reasonable value of the REL Shares being compulsorily acquired to be calculated by:

(a)      first assessing the value of all the equity securities in the class of equity securities of which the equity security forms part; and
(b)      then allocating that value pro rata among all the securities of that class.

The amount determined by the independent expert will be the amount that H&G will pay to all outstanding shareholders. If it is higher than the acquisition price, all outstanding shareholders will get a "top-up".  If the amount is less, outstanding shareholders can be required to return the difference to H&G (H&G has advised that it will seek to recover the amount of any overpayment).

The independent expert must make its determination of the fair and reasonable value of REL Shares within 20 working days after being appointed. 

If you wish to be considered for appointment as the independent expert under rule 57 to determine the consideration payable to outstanding holders of REL Shares, the Panel invites you to submit a proposal. Your proposal letter should provide the Panel with the following information:

(a)      your qualifications, expertise and relevant experience;

(b)      the names of the individuals who would prepare the determination and copies of their current curricula vitae;

(c)       confirmation that the determination would be completed within 20 working days of appointment;

(d)      a statement that you have no conflict of interest that could affect your ability to provide an unbiased determination;

(e)       disclosure of all past and present relationships with REL, H&G (or any of its associates or shareholders) and the directors and managers of any such entity;

(f)        confirmation that you have sufficient professional liability insurance for the purposes of appointment as independent expert;

(g)      the fee you would charge in respect of the determination or, if not fixed, the basis on which the fee would be calculated and an estimate of the fee; and

(h)      your proposed terms of engagement. Please note that the Panel is not able to provide any indemnification which might be customary. However, under the Code, H&G must meet the appointee’s costs. The Panel considers any amount payable under an indemnity to be part of the costs that H&G must pay.

Applications must be sent via email to Mark Cunliffe and Amelia Dunn (details below) by 12.00 p.m., Monday 17 February 2025.

 
The Panel intends to make an appointment as soon as possible.

The Panel notes that this is not a tender. The Panel is under no obligation to accept any proposal and may discuss terms with any respondent. While price is a relevant consideration, it is not the only factor. The Panel will weigh the matters referred to above in its discretion.

Media Contact

Andrew Hudson, Chief Executive

E: andrew.hudson@takeovers.govt.nz

M: +64 21 815401 | DDI: +64 4 815 8452