Takeovers Panel approval carries conduct warning

By JIM EAGLES

The Takeovers Panel has given North Island meat giant Richmond and its South Island predator PPCS a subtle warning to watch what they say during their increasingly bitter takeover battle.

Over the weekend the panel cleared the latest bid by PPCS to buy Richmond.

In the process it took the unusual step of issuing a reminder of the obligations of both the bidder and the target company in takeover situations.

"The panel does not," it said, "find it necessary in this case to comment on the rights or wrongs of either party with respect to public statements and disclosures about the takeover."

But it did wish to "draw the attention of takeover participants generally to two matters".

The first was that officers and directors on both sides were required to certify the correctness of any documents they provided.

"That is an obligation which the panel takes seriously ... "

The second was that the directors of both groups "have obligations ... in the takeover context in relation to any statements or publicity which may be issued. Those obligations are not limited to the formal takeover documents".

That message delivered, the panel allowed the PPCS offer of $3.05 a share to proceed.

There are still legal actions waiting in the wings but investors will now be watching to see if enough of Richmond's 1980 shareholders accept the PPCS price for their shares and to see if a rival bid emerges.

The panel was asked to rule on three aspects relating to the offer.

Richmond had asked if it was acceptable for PPCS to include a provision that allowed it to waive the minimum acceptance level of 90 per cent.

The panel decided that this waiver was within the code.

Richmond also questioned whether the takeover bid should be required to include an offer to holders of the optional convertible notes issued by Richmond in October 2001. The panel decided that was not necessary.

The Bell group of Richmond shareholders, which has been to the forefront of the battle against PPCS, asked the panel whether the explanatory notes in the PPCS offer were "materially misleading".

The panel ruled that the notes represented a reasonable attempt to explain an extremely complex situation.

The PPCS offer closes on February 26.