LAWYERS' OPINION: ‘Tui Notes Protected’

Press, Volume CIX, Issue 31902, 1 February 1969, Page 18

LAWYERS' OPINION: ‘Tui Notes Protected’

(New Zealand Press Association)

WELLINGTON, January 31.

Lawyers do not consider that the terms of the proposed take-over of Tui Brewery, Ltd, by Dominion Breweries, Ltd, contravenes the Tui convertible note trust deed, a Tui director said today.

The question has been raised because Dominion has offered five shares for eight Tui ordinary shares but five shares for nine Tui notes, whereas the notes were issued with the undertaking that they would be converted, one-for-one, to Tui ordinary shares next year. The trust deed under which the notes were issued included also a provision that, in event of the company receiving an unconditional takeover offer, the notes would be converted one-for-one into Tui ordinary shares. DISCUSSIONS Today Mr L. A. Mills, deputy chairman of Tui, who! lives in Wellington and hasbeen a party to matters lead-1 ing to the offer, said the! Tui directors had had discussions with the Trustees Executors and Agency Company, of New Zealand, Ltd. the trustee for the noteholders. The directors had been told that, in the opinion of the trustee, the interests of Tui noteholders during the recent take-over negotiations had been adequately protected. Mr Mills said that independent solicitors had told the trustee that the procedures laid down in the trust deed had been properly followed by the directors of both Tui and Dominion. SPECULATION The Wellington manager of the trustee company (Mr D. H. Hume) said: “The full offer has not yet been circulated to shareholders and noteholders of Tui Brewery, Ltd, and therefore there is a certain amount of speculation as to the.con-, tents of such offer.

“It would appear from the trust deed that conversion of the notes to shares takes place after an offer is declared unconditional. BARGAINED “Furthermore," Mr Hume said, “the trust deed does not require an offer to be made to noteholders, but we under-

stand that the Tui directors have protected the interests i of these persons by bargain- • ing for an offer, certainly slightly less, to be made to them.” i It is understood that the t formal Dominion Breweries • offer will be mailed in about • a week.