Ind. Equity re-instated

Press, 6 February 1982, Page 17

Ind. Equity re-instated

PA Sydney Trading in the shares of Industrial Equity, Ltd, (lEL) resumed on Australian stock exchanges yesterday, but only after the company gave legal guarantees to the Sydney exchange concerning the drawn-out battle about the take-over bid for Huttons, Ltd, - The exchange’s companies manager, Mr Phillip Mitchelhill, said lEL shares would be reinstated after a deed poll under seal was received to the effect that lEL’s wholly-owned subsidiary, Conquip Sales Pty, Ltd, would reduce its shareholding in Huttons from the present 27.6 per cent to 20 per cept within three months. The deed binds lEI to all six conditions announced by the committee of the Sydney exchange last month.

The reinstatement came after a statement by lEl’s chairman, Mr Ron Brierley, that he would seek the delisting of lEL if the suspension on trading of its shares was not lifted by February 2. . The return of a market for the shareholders in lEL resolves a long-running battle between lEL and the exchange over listing requirements.

The battle began last year when Conquip bought 27.6 per cent of Huttons but failed to mount a full takeover bid. Exchange listing requirements demand that a bid must be made once a shareholding reaches 20 per cent.

TEL’s failure to so bid resulted in its suspension. The National Companies and Securities Commission then brought an action in the Supreme Court of New South Wales to have the listing requirement enforced against lEI to force a bid.

However, Mr Justice Needham handed down a judgement on December 30 ruling that lEL need not make such an offer for Huttons because it acted through a subsidiary (Conquip). The Sydney stock exchange chairman, Mr Frank Mullens, said on January 13 that lEL must divest itself of the extra 7.6 per cent to have the suspension on its shares lifted and it must meet six conditions. The conditions were that the divestment be to parties not associatred with lEL; that the consideration paid for the shares be disclosed as well as the terms: shares divested not be subject to any buy-back, put or call option or escalation agreement; shares divested not be subject to any agreement relating to voting rights or proxies; that lEL and persons acting in concert with it not assist in financing the purchase of shares to be sold; and that lEL not acquire further shares in Huttons within six months without making a bid. Under exchange rules, the holder of 20 per cent of a company can increase the holding by 3 per cent every six months.