NZSE considers complaint about GPG purchase of Rubicon stake

By NZPA

Monday 8th July 2002

The New Zealand Stock Exchange has decided a complaint about Guinness Peat Group's (GPG) purchase of 18 percent of Rubicon last week should be taken to the exchange's disciplinary committee.

On Friday the exchange said it was unable to reverse or modify any portion of the purchase of 50.3 million Rubicon shares, by broker JB Were on instruction from GPG.

However, the NZSE said it was continuing to investigate whether the transaction constituted a breach of its rules and regulations after it prompted a complaint.

Today the exchange said in a statement its board had considered the complaint, along with submissions from JB Were.

"The board has resolved that charges relating to this conduct should be prepared and, after final board approval, laid before the disciplinary committee."

Last Wednesday's overnight swoop on Rubicon caused market ructions that rekindled memories of Lion Nathan's midnight raid on Montana last year that was eventually ruled out of order by market regulators.

GPG bought 50.3 million Rubicon shares at 75 cents each, a 13.6 percent premium over the prevailing price

Stock exchange rules require a member firm that receives an order to buy more than 10 percent of a company to "bid in the market for 20 percent of that order from other member firms".

Brokers said GPG could have been made to buy another 3.6 percent of Rubicon on-market which would take it over 20 percent of the company, thereby triggering the Takeovers Code and forcing GPG to make a takeover.

Both JB Were and GPG said last week they had advice that the way the deal had been done was legal.

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