Forum Archive Index - August 2000

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

I received a letter from the Hutt Mana Energy Trust today saying:

"By acquiring the Trust's shares, NGC will have more than 90% 
shareholding it needs to compulsorily acquire those Transalta New 
Zealand shares owned by shareholders who do not accept the NGC 
offer."

My memory is that the company must get acceptance from holders of 90% 
of the outstanding *shares on issue* that are *not beneficially 
owned* before proceeding with compulsory acquisition, which is a 
rather different proposition.

If the trust letter is correct, consider the case scenario where only 
10.1% of a company's shares are not under the wing of a majority 
shareholder.  This means the majority controlling shareholder could 
make an offer to an entity that holds only 0.1% of the shares 
(therefore bringing their total shareholding to 90%), which if 
accepted could force the remaining shareholders who own a significant 
10% of the company to sell at the price accepted by that one 
individual.  This cannot be correct, so what am I missing? SNOOPY


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