Fruit and produce exporter Turners & Growers has suspended its proposed takeover offer for Kerifresh.
The suspension follows a finding this month by the Takeovers Panel that Kerifresh managing director Alan Thompson, director Hamish McHardy, McHardy-controlled firm Sundry Investments, former director Graham Cowley and his company Iron HillsVineyards, and Emma Jane Eastwood and her company Anbran Trustee Company had not complied with the Takeovers Code.
The panel found the parties broke rules under which a person and their associates are not allowed to own or control more than 20 per cent of a company's stock without making a takeover bid or getting shareholder approval.
NZX-listed Turners & Growers intended offering $2 a share in cash for the Kerikeri citrus fruit producer, valuing the company at $15.1 million.
However, on the day it gave notice of the intended bid Turners also made a complaint to the Takeovers Panel about various share transactions in Kerifresh stock since 2002.
Turners chairman Tony Gibbs said that, given the breaches of the code,it was not appropriate to proceedwith the takeover at this time.
The panel has said it would make orders for costs and meet to decide upon remedies.
"It is not clear what number of shares may be forfeited and what consequential effect this will have on the value of the remaining Kerifresh shares," Gibbs said.
"Further, the terms of any compelled sell-down by the shareholders in breach are not yet known."
Turners could not determine the effect of any potential action on the terms of the proposed offer and neither could an independent report determine the merits of the bid so as to properly inform minority shareholders, Gibbs said.
Kerifresh managing director Alan Thompson said the suspension of the takeover bid would not affect the company.
"We're very surprised [by the panel's determination] but that's about all the comment we can make at this stage," Thompson said.
Interim restraining orders preventing parties from trading Kerifresh shares and using voting rights expire on November 8.
Gibbs said Turners had been careful to say the situation did not mean the company was closing the offer. Shares in Turners & Growers closed up 8c yesterday at $2.23.
