Marlborough Lines goes to court on failed takeover bid
Horizon Energy Distribution says Marlborough Lines has filed proceedings in the High Court against the Takeovers Panel and the company.Marlborough Lines is questioning the jurisdiction of the panel to convene a meeting under se32 of the Takeovers Code to
Horizon Energy Distribution says Marlborough Lines has filed proceedings in the High Court against the Takeovers Panel and the company.
Marlborough Lines is questioning the jurisdiction of the panel to convene a meeting under se32 of the Takeovers Code to rule on outstanding amounts owing to Horizon Energy as a result of a failed takeover by Marlborough Lines in September 2009.
Marlborough Lines moved this month to take a 10.1% stake in Horizon via a stand in the sharemarket.
It was also challenging the panel's award of costs as a result of an earlier s32 meeting called by Marlborough Lines, and the panel's decision dismissing submissions by Marlborough Lines at that meeting.
The panel is the first defendant in the action and Horizon Energy is the second defendant.
The panel met on March 22 to consider three issues arising from the unsuccessful takeover offer last September. Marlborough Lines bid for 51%t of Horizon Energy.
Horizon Energy is a Whakatane-based electricity network company 77.6% owned by the Eastern Bay Energy Trust, which itself wanted to move to 100% ownership.
The issues considered by the panel related to a revised profit forecast issued by Horizon Energy on September 28, the day before Marlborough Lines made its takeover offer, and to a statement in Horizon Energy's target company statement about the directors' view of the value of the company.
The question in each case was whether Horizon Energy's statements were misleading or deceptive or were likely to mislead or deceive.
The panel determined that Horizon Energy did not breach the provisions of the takeovers code when issuing its revised profit outlook. It ruled that Horizon Energy did breach the code by omitting to disclose that a material part of the increased profit outlook had come about from a change to the accounting treatment of internally constructed assets.
It did not find a breach when Horizon Energy directors stated in the target company statement that they assessed the company to be worth more than the value range for Horizon Energy expressed by the independent adviser in its report for shareholders.
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