Panel says GPG's Rubicon offer breaches code

The Takeovers Panel has blocked Guinness Peat Group's $67 million partial takeover offer for Rubicon, saying it breaches the Takeovers Code.

GPG, already a 19.9 per cent Rubicon shareholder, had offered 75c a share for a further 40 per cent, which would give it a 51.99 per cent controlling stake.

If GPG failed to reach that target, it offered to buy shares which would take its holding to between 30 and 50 per cent stake. Shareholder approval would be required for a stake between 20 and 50 per cent.

The panel objected to the dual nature of GPG's offer. It said partial offers had to be made for a specific percentage of a company and GPG was not entitled to have a fallback position. GPG's offer meant Rubicon shareholders could not know precisely what they were being asked to agree to.

At a hearing on Thursday, GPG argued that the panel's interpretation was unduly restrictive and ignored commercial realities.

The panel said it was liberal compared with other countries.

GPG was barred from buying Rubicon shares until 5pm on September 27. It can make a new offer for Rubicon, if it complies with the code.

The panel also considered a complaint from Perry Corporation, a 16 per cent shareholder in Rubicon. Perry is prevented from selling its Rubicon shares by a GPG injunction pending a court hearing. Perry complained that the offer breached the Takeovers Code because it could not take part.

The panel did not uphold Perry's complaint because GPG was obliged only to extend its offer to all shareholders, not to ensure that all shareholders were able to accept it.

The Rubicon takeover attempt was prompted by the company's pivotal shareholding in Fletcher Challenge Forests.

Rubicon owns 18 per cent of Fletcher, making it the largest shareholder in New Zealand's second-largest forest owner.

Shares in Fletcher and Rubicon have been trading below net asset value, making a takeover an attractive proposition.

GPG director Tony Gibbs said after the ruling was announced on Friday night that the company would make another attempt to gain control of Rubicon. Rubicon shares closed on Friday unchanged at 72c.