Oyster Bay broke takeover rules

The long-running takeover battle for Oyster Bay Marlborough Vineyards got new legs yesterday when the Takeovers Panel ruled Oyster Bay contravened the Takeovers Code.

The panel met on Monday to consider complaints by rival bidder Peter Yealands Investments and David Rankin that a target company statement issued by Oyster Bay in relation to the Delegat's offer was misleading.

The panel said last week that it agreed with Yealands' complaint about how Oyster Bay's land had been valued and would make a ruling this week.

"The Panel is not satisfied that Oyster Bay complied with the Code in that the target company statement omitted information about the market value, encumbered and unencumbered, of Oyster Bay's freehold and leasehold vineyards that could reasonably have been expected to be material to decisions by Oyster Bay's shareholders to accept or reject Delegat's offer," the panel said.

It made several orders, including:

* Restraining Delegat's from acquiring securities in Oyster Bay or any interest in or rights relating to such securities.

* Directing that Delegat's not declare its offer unconditional.

* Continuing to direct Oyster Bay not to register the transfer or transmission of any securities arising from acceptance of Delegat's offer.

The restraining orders expire at the close of trading on October 13 but may be revoked or amended before, the panel said.

Delegat's said last night it was confident that its offer for Oyster Bay shares would be successfully completed.

Its offer was $4 a share to increase its stake from 32 to 51 per cent. It received enough acceptances to gain control. More than 80 per cent of shareholders, including Peter Yealands, have now accepted the offer.

The panel said its preferred outcome was that Oyster Bay shareholders who had accepted Delegat's offer be given a chance to reconsider.

The process for giving shareholders that opportunity should be finalised within the next week and completed in just over a month.

Shareholders who accepted the Delegat's offer will be sent an additional statement by Oyster Bay's independent directors, approved by the panel, providing information omitted from the target company statement.

Shareholders will have three weeks to decide whether to revoke their acceptances.

The panel said it was prepared, among other things, to amend its restraining orders.

Takeover panel said

* Oyster Bay contravened the takeover code when it left out vital information regarding its market value in a statement to shareholders.

* The panel prefers to have Oyster Bay shareholders given the information so that they can vote again on the bid.

* The process could take over a month.

- NZPA