The Securities Commission says it could not establish whether there was any insider trading in Arthur Barnett shares before a takeover offer was announced in August.
The commission said today that it had completed an inquiry into trading of shares in the Dunedin-based retailer.
On August 6, Arthur Barnett announced that a
takeover offer for all the company's shares was likely in the next 10 days at a price significantly higher than the current market price. Shareholders were told not to sell pending further advice.
Between July 15 and 31, 604 Arthur Barnett shares were traded on the stock exchange at 72 cents. On August 1 15,000 traded at 78 cents. The following day 15,273 traded at an average price of 82 cents.
So between July 15 and August 2, the Arthur Barnett share price increased by some 14 per cent, the commission's enforcement director Norman Miller said in a statement.
Subsequently Arthur Barnett was taken over by Belwalsh Holdings at a price of $1.40 per share.
"The commission's inquiry considered whether anyone with inside information about the proposed takeover offer may have bought shares, either directly or indirectly, or may have tipped another person about the proposed takeover offer, before the August 6 announcement," Mr Miller said.
He said the inquiry found that all the Arthur Barnett shares traded between July 15 and the August 6 announcement were bought by one person. But they were bought as part of an original order, placed with a broker at the beginning of the year, to acquire 100,000 Arthur Barnett shares.
"The commission questioned the person about the circumstances of the trading, his knowledge of the company and reasons for buying, as well as any links that he may have had with the parties involved in the takeover. The person's broker was asked about the circumstances in which the purchase order was placed.
"On the evidence the commission could not establish that the person who bought the Arthur Barnett shares had inside information about the possible takeover."
Belwash, owned by Dunedin businessmen Trevor Scott and Julian Smith, succeeded with its $9.5 million takeover and Arthur Barnett is about to be delisted from the stock exchange.
Belwash's offer of $1.40 per share compared with independent valuations of between $1.51 to $1.64, but shareholders took the independent advice that the offer was unlikely to be bettered in the near future.
- NZPA
