Take-over restrictions

Press, 2 September 1977, Page 18

Take-over restrictions

i PA Wellington! 1 Legislation dealing with! I I take-over bids will be in-h | eluded in a comprehensive: i securities exchange bill to i ! be introduced in the next : |two or three years, the Act-[I ling Minister of Justice (Mr!i Wilkinson) told Parliament [> | on Wednesday. I In the meantime, the posi-i I tion of publicly listed com-! ■ panies appeared to be cov-j ered by a draft code on take- i overs recently published by; the Stock Exchange Association of New Zealand, he said. Mr Wilkinson was reply-1 i ing to a question by Mr T. J, I i Young (Lab., Hutt), who ! I asked if the Minister of Justice intended introducing leg-! islation this session to! !‘prevent persons or compan-i lies issuing a bid for the take-1

over of another company, |i : with the creation of uncer-ji : tainties similar to those that I i developed in Borthwick’s bid!’ for the Gear Meat Company i made through newspaper i statements where there has i [ been no discussion with the i 'directorship of the offeree [company before to the news- i I paper offer, and where there i | is much doubt as to whether i the bid will succeed.” i Mr Wilkinson said he wel-l ! corned the Stock Exchange i | Association's initiative in ■ (publishing the draft code but I [agreed with Mr Young that . [legislation would also be I necessary. | The provision in the draft | code for take-overs of publicly listed companies says: “A false or uninformed (market must not be allowed I to develop by the offeror or I offeree company in either’s

shares. In normal circumistances the publication of an! I intent to make an offer.; without actually giving; notice or of making that; offer, will be regarded as an! attempt to create a false! market in either share.” ; Mr Wilkinson said it remained to be seen how effective the take-over code would prove without legislative sanctions. I Asked by Mr Young what action he intended to take to ensure that the law was upheld, Mr Wilkinson said the Justice Department would move if the Stock Exchange [rules were not being followed. One way would be to reduce the percentage of shares for which prior notice of a take-over had to be given from 50 per cent to 25 or 20 per cent.