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Summary of

Securities Act (Rural Portfolio Investments Securities Limited and Rural Portfolio Investments Limited) Exemption Notice 2004

2004/89

Gazetted on 8 April 2004
Expires on 30 September 2004

Effects of the exemption
Rural Portfolio Investments Limited (RPI) and its wholly owned subsidiary Rural Portfolio Investment Securities Limited (RPI Securities) are able to offer redeemable preference shares as all or part consideration in a takeover offer, without including certain information in the registered prospectus for the shares. The partial takeover offer, made under the Takeovers Code, relates to Wrightson Limited (Wrightson).

Background
RPI intends to acquire majority ownership of Wrightson. Under the partial takeover offer, investors will be offered cash and/or redeemable preference shares issued by RPI Securities. RPI Securities also proposes to offer the redeemable preference shares to a wider range of persons than just the shareholders of the target company.

The exemption
RPI and RPI Securities are exempted from:

• clause 10(1)(b) of the First Schedule of the Securities Regulations 1983, to the extent that it requires disclosure in relation to any proceeds that are Wrightson shares; and
• clause 10(2) of the First Schedule; and
• clause 11(3)(f) of the First Schedule.

Conditions
The exemption from clause (10)(1)(b) is subject to the condition that the registered prospectus for the shares states:

• the expected effect of the partial takeover by RPI on the operations of Wrightson; and
• the plans of RPI's directors for Wrightson.

The exemption from clause 10(2) is subject to the condition that the prospective statement of cash flows required by clause 10(1)(c) shows:

• the likely effect on the cash flows of RPI of the company's acquisition of Wrightson shares as a result of the offer; and
• the principal assumptions on which the statement of cash flows is based.

The exemption from clause 11(3)(f) is subject to the condition that the registered prospectus:

• contains or refers to all the information required under clause 11(3)(f) relating to Wrightson that is within the knowledge, possession, or control of RPI and is not already contained in the RPI offer document; and
• specifies and provides cross references for the information required under clause 11(3)(f) relating to Wrightson that is already contained in the RPI offer document; and
• specifies the information required under clause 11(3)(f) relating to Wrightson that is not contained in the prospectus or offer document, and gives the reasons why.

Each of the exemptions is also subject to the condition that the registered prospectus for the shares must accompany the takeover notice proposed to be sent to Wrightson under rule 41 of the Takeovers Code.

Reasons
A significant part of the consideration for the offer may be Wrightson shares. The conditions of the exemptions from clauses 10(1)(b) and 10(2) require that more meaningful information will be provided to investors regarding the effect of the proposed takeover than the information required by those clauses.

The conditions of the exemptions from clauses 10(1)(b) and 10(2) are the same as those in the Securities Act (Takeovers) Exemption Notice 2001.

The exemption from clause 11(3)(f) is necessary because RPI has access only to published historical financial information about Wrightson, and the conditions of exemption require that investors are informed about what information is missing and that they are provided with the best available information.