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02 July 2001

News Release

EXEMPTION FOR OFFERS OF SECURITIES IN TAKEOVER BIDS

The Securities Commission has decided to grant an exemption from aspects of the Securities Act 1978 and the Securities Regulations 1983 for offers of securities made in takeover bids (scrip offers).

With the coming into force of the Takeovers Code on 1 July, scrip offers are now subject to both takeovers law and securities law.

The Commission recently sought public comment on a possible exemption for scrip offers.

After considering the responses it has decided to grant a class exemption based on Proposal Three of its discussion paper dated 1 June. That paper, Offers of Securities in Takeover Bids, is available on our website www.seccom.govt.nz. The Takeovers Panel supports an exemption based on that proposal.

This exemption divides issuers of securities in scrip offers into two categories.

The first category is issuers that have been quoted on the New Zealand Stock Exchange for at least 12 months. Under the exemption these issuers will be able to register an abbreviated prospectus which will include the information generally set out in clause 18(1) of Schedule 1 to the Takeovers Code.

Other issuers will receive a more limited exemption from the prospectus requirements of the Securities Regulations.

All issuers will still be required to provide an investment statement (IS), but the required contents of the IS will be tailored to reflect the different circumstances of a takeover.

The Commission considers that the exemption achieves a balance between making information available to investors and facilitating takeover activity. Investors will continue to have remedies available to them under both the Securities Act and the Takeovers Code.

Contact: Catherine Chapman phone (04) 471 7659

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