Takeovers Code (Ormiston Surgical & Endoscopy Limited) Exemption Notice 2011

  • expired
  • Takeovers Code (Ormiston Surgical & Endoscopy Limited) Exemption Notice 2011: expired, on 1 October 2011, by clause 3.

Statement of reasons

This notice applies to acts or omissions occurring on or after 28 June 2011 and expires on the close of 30 September 2011.

Ormiston Surgical & Endoscopy Limited (Ormiston) proposes to issue 865 782 voting securities in Ormiston (the proposed allotment) to Southern Cross Hospitals Limited (Southern Cross). As Southern Cross currently holds or controls more than 20% of the voting rights in Ormiston, it can only increase its voting control in Ormiston through the proposed allotment if shareholders first approve the proposed allotment by an ordinary resolution in accordance with rule 7(d) of the Takeovers Code (the Code).

However, rule 17(2) of the Code prohibits the allottee and its associates from voting on a resolution for the approval of an allotment. Ormiston’s shareholders may all be associates of Southern Cross by virtue of being parties to the Ormiston Shareholders’ Agreement (the agreement), which, amongst other things, contains clauses concerning voting on board representation and pre-emptive rights. In the absence of an exemption, the shareholders of Ormiston may therefore not be able to vote on the resolution to approve the proposed allotment.

The Takeovers Panel (the Panel) has granted an exemption from rule 17(2) of the Code for the shareholders of Ormiston other than Southern Cross, to the extent that they are associates of Southern Cross by virtue solely of the agreement.

The Panel considers that it is appropriate and consistent with the objectives of the Code to grant the exemption because—

  • all current shareholders of Ormiston may be associates for the purposes of the Code due to their participation in the agreement and, as such, the mechanisms provided in the Code for the approval of Southern Cross’s proposed increase of voting securities in Ormiston through the proposed allotment are unworkable; and

  • Ormiston has provided a detailed enforceable undertaking under section 31T of the Takeovers Act 1993 to use all reasonable endeavours to seek the effective termination of the agreement as soon as practicable after the proposed allotment has taken place; and

  • the exemption provides Ormiston with the opportunity to make a reasonable transition to full compliance with the Code; and

  • Ormiston’s shareholders will have the opportunity to vote (on a fully informed basis) to approve Southern Cross’s voting control increase; and

  • the exemption maintains a proper relationship between the costs of complying with the Code and the benefits resulting from it.