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Summary of

Securities Act (Noel Leeming Limited) Exemption Notice 2004

2004/203

Gazetted on 1 July 2004
Expires on 31 December 2004

Effects of the exemption
The exemption

• enables Noel Leeming Limited (Noel Leeming) to make pre-prospectus statements that refer to certain retail businesses and brands associated with Pacific Retail Limited in advance of the proposed initial public offering (IPO) of Noel Leeming securities; and
• enables these pre-prospectus statements to refer to the listing or intended listing of Noel Leeming on an NZX Market.

Background
Noel Leeming wishes to gauge public interest in advance of a proposed IPO through pre-prospectus advertisements that mentioned certain brands and businesses operated, directly and indirectly, by Pacific Retail Limited (a wholly owned subsidiary of Pacific Retail Group Limited). The Commission was told that on or about completion of the IPO, Noel Leeming would acquire these retail brands and businesses.

Noel Leeming considered that the ability to refer to these businesses and brands would raise the market profile for the IPO. It would provide the public with a recognised reference point for assessing whether to seek further information about the IPO, and would enable them to be informed of the retail brands that Noel Leeming would acquire.

Noel Leeming also wished to refer in its pre-prospectus advertising to an intention to apply for listing on the NZSX.

The exemption
Noel Leeming is exempted, subject to conditions, from

• section 33(1) of the Securities Act;
• from regulation 17(2) of the Securities Regulations (to the extent it requires the certificate required by regulation 17(1) to be in the form set out in the Fourth Schedule); and
• from regulation 23.

The exemption applies to statements made by or on behalf of Noel Leeming in advance of a proposed IPO to the effect that Noel Leeming intends to make an offer of securities to the public before the prospectus is registered.

Conditions
The exemption from section 33(1) of the Act is subject to the condition that any such statement -

• states that Noel Leeming is considering making an offer of securities to the public; and
• states that no money is currently being sought and that no applications for securities will be accepted or money received unless the subscriber has received an investment statement for the securities; and
• may state that Noel Leeming is seeking preliminary indications of interest and, in that case, also states how indications of interest may be made and that no indication of interest will involve an obligation or commitment of any kind; and
• contains no other information, except any or all of the following:
• the full name of Noel Leeming, and a brief description of it, and the nature of its proposed business (including the brands and businesses Noel Leeming will own or manage);
• a description of the securities intended to be offered, including a brief description of any rights or privileges to be attached;
• the rate or rates of interest (if any) that may be earned by holding the securities intended to be offered;
• the total number of securities intended to be offered;
• a statement of the intended use of the subscriptions;
• the terms of the intended offer of the securities;
• a description of the class of persons to whom it is intended the offer will be made;
• the date at which Noel Leeming expects that the offer of the securities will be made; and
• is dated and not distributed to any person later than 6 months after its date.

The exemption from regulation 17(2) is subject to the condition that a modified form of directors' certificate is prepared, as set out in a Schedule to the exemption notice, that does not refer to a registered prospectus or investment statement.

The exemption from regulation 23 is subject to the condition that any statement made by or on behalf of Noel Leeming contains no statement referring to listing or intended listing of the securities on a market operated by NZX, other than a statement that has been approved by NZX.

Reasons
Section 5(2CA) of the Act permits issuers to make pre-prospectus statements about an intended offer in order to gauge potential investor interest in the offer. In this case including information about Noel Leeming's business (and the retail businesses and brands that are to be owned or managed by it) will give prospective investors relevant information about the offer.

A regulation 17 certificate must still be completed by the company. The exemption simply permits this to be drafted in a slightly different format to that contained in the Fourth Schedule. The amended form of certificate recognizes that a registered prospectus and investment statement are not yet available.

Strict compliance with regulation 23 would not allow statements referring to listing or intended listing. The exemption from regulation 23 is appropriate as it enables pre-prospectus statements to refer to listing or intended listing of the share on a market operated by NZX, if the statement has been approved by NZX.

The Commission has previously granted exemptions allowing limited pre-offer publicity on similar terms and in similar circumstances. Any pre-prospectus statement made must clearly explain that no money is currently being sought and that no application for securities will be accepted, or money received, unless the subscriber has received an investment statement.