Takeovers Panel on Hawkins' takeover of Cynotech Holdings

The Takeovers Panel has made the following points with respect to the article 'Allan Hawkins confident of success in second tilt at Cynotech,' written by the BusinessWire agency and published on nzherald.co.nz.

The article stated that the Takeovers Panel had said that the takeover would not disadvantage other security holders of Cynotech Holdings Ltd. The Takeovers Panel never comments on the merits of takeovers.

The Code requires Cynotech Securities Group to make an offer for all the Cynotech equity securities on issue - shares and convertible securities in the form of convertible preference shares and warrants.

The strict rules of the Code may require CSGL to seek shareholder approval if it wanted to convert the convertible securities obtained under the takeover offer into voting shares.

The exemption means CSGL would not have to comply with the Code twice in respect of the same securities - firstly in acquiring the securities and secondly getting shareholder approval to convert those securities to shares, increasing CSGL's "voting control."

The Panel exempted named shareholders of Cynotech related to Hawkins (the specified security holders) from rule 35 of the Code to deal with a technical procedural problem. Because the parties are related they would have been prevented from accepting the takeover offer.

The exemption simply fixes that problem and allows the specified security holders to accept CSGL's takeover offer, if they so wish."