EBO
06/06/2013 08:30
WAV/RULE
REL: 0830 HRS Ebos Group Limited
WAV/RULE: EBO: EBO - Waiver from NZSX Listing Rule 7.10.2
5 June 2013
NZX Regulation Decision
EBOS Group Limited
Application for Waiver from NZSX Listing Rule 7.10.2
Background
1. EBOS Group Limited ("EBO") is a Listed Issuer with ordinary shares quoted
on the NZX Main Board.
2. On 29 May 2013, EBO announced that it had entered into an agreement to
acquire Zuellig Healthcare Holdings Australia Pty Limited ("Symbion") from
Symbion Holdings Pte Limited ("the Vendor") (the "Acquisition"). Symbion is a
privately owned company based in Australia involved in the supply of
pharmaceuticals and medical supplies to hospitals in Australia, as well as
the distribution of veterinary supplies.
3. EBO and the Vendor have reached a purchase price for Symbion of $865
million ("Purchase Price"). EBO will satisfy the Purchase Price through the
issue of fully paid ordinary shares in EBO to the Vendor worth approximately
$498 million and a cash payment of approximately $367 million ("Consideration
Cash").
4. EBO will fund the Consideration Cash by:
(a) An underwritten placement of EBO ordinary shares worth approximately $90
million to new and existing institutional investors;
(b) Undertaking an underwritten, 7 for 20 pro-rata renounceable rights offer
worth approximately $149 million (the "Entitlement Offer"); and
(c) Additional debt facilities of approximately $140 million.
5. The Entitlement Offer is scheduled to open on 17 June 2013, and close on 1
July 2013, being 10 Business Days after letters of entitlement are mailed on
17 June 2013. As the Entitlement Offer will only proceed if EBO shareholders
approve the Acquisition at the Special Meeting to be held on 14 June 2013,
rights under the Entitlement Offer will be quoted and tradeable on the NZX
Main Board from 12 June 2013 on a conditional basis until the results of the
Special Meeting are known.
Application
6. EBO has applied to NZX Regulation ("NZXR") for a waiver from NZSX Listing
Rule ("Rule") 7.10.2 so that it may set the closing date for applications
under the Entitlement Offer as 10 Business Days after the mailing of letters
of entitlement, instead of the 12 Business Days required by Rule 7.10.2. EBO
has suggested that the following conditions apply to any waiver granted:
(a) The prospectus and acceptance form contain prominent statements
encouraging shareholders to accept early and utilise direct credit as a
payment option;
(b) The prospectus is posted as soon as practicable after the shareholder
meeting on 14 June, and in any event before the end of 17 June 2013;
(c) EBO files an Appendix 7 confirming the offer timetable as soon as a
waiver is finalised and release to the market copy of the prospectus, and
post a copy on its website, promptly after registration; and
(d) Letters of entitlement and the prospectus be sent by fast post to those
outside Auckland (being the place EBO's share registrar/mail house are
located).
7. In support of its application EBO makes the following submissions:
(a) For commercial reasons, the Vendor has required funding certainty as a
precondition to entry into the Acquisition, and requires settlement of the
Acquisition to occur on 5 July 2013;
(b) While an opening date of 17 June 2013 and closing date of 3 July 2013
would enable 12 Business Days for acceptance as required by Rule 7.10.2,
EBO's directors are concerned that retail shareholders applying in the rights
issue by mail, and wishing to pay by cheque, may have their applications
rejected if their application is delayed in the post or if their cheque
payments do not clear by the closing date of 3 July 2013;
(c) It is in that context that EBO seeks a waiver to enable an earlier
closing date (and consequent earlier renunciation closing date) to increase
the likelihood of acceptances being received on time and payment clearing,
rather than retail shareholders with late applications missing out or an
uncleared payment rejected (with any shortfall, after processing
oversubscriptions, reverting to underwriters/sub underwriters);
(d) In EBO's and its advisers' experience, many applicants leave it to the
last minute to complete their applications. Accordingly, the directors'
strong preference is to allow 10 Business Days for applications and allow
enough time for clearance rather than run the risk of having to reject retail
applications;
(e) The simplified disclosure prospectus in respect of the Entitlement Offer
includes very similar information to the notice of meeting materials and
independent report, both of which were provided to the market and sent to EBO
shareholders on 29 May 2013. The notice of meeting also included an
indicative timetable for the Entitlement Offer. The market is therefore
already fully informed in relation to the Entitlement Offer;
(f) EBO has considered whether the Entitlement Offer could open earlier, to
enable it to close earlier. However, EBO's directors consider it would not be
appropriate to mail the acceptance forms before shareholders approved the
Acquisition on 14 June 2013. Furthermore, if the standard T+3 settlement
period applied, an earlier Record Date would result in the renounceable
rights settling before the results of the Special Meeting are known, and EBO
has confirmed that the Entitlement Offer would proceed. EBO understands that
NZX would have potential concerns with rights being required to settle ahead
of the meeting, notwithstanding EBO's very high degree of confidence that the
Acquisition will be strongly supported by shareholders;
(g) NZX has granted several waivers from Rule 7.10.2 in the context of rights
issues and share purchase plans shortening the time for acceptance. While
often fact specific, these include waivers for Fletcher Building Limited
(1/4/2009), Nuplex Industries Limited (20/3/2009), Pike River Coal Limited
(16/3/2009), and Precinct Properties New Zealand Limited (30/1/2007); and
Rule 7.10.2
8. Rule 7.10.2 provides that:
"Without limiting Rule 7.10.1, the closing date and time for applications
under Rights issues (whether or not renounceable) shall not be earlier than
the 12th Business Day after the day of mailing of the last of the letters of
entitlement"
Decision
9. On the basis that the information provided to NZXR is full and accurate in
all material respects, NZXR grants EBO a waiver from Rule 7.10.2, so that the
closing date for the Entitlement Offer may be 10 Business Days after the
mailing of entitlement letters, on the following conditions:
(a) The prospectus and acceptance form contain prominent statements
encouraging shareholders to accept early and utilise direct credit as a
payment option;
(b) The prospectus is posted as soon as practicable after the shareholder
meeting on 14 June, and in any event before the end of 17 June 2013;
(c) EBO files an Appendix 7 confirming the offer timetable as soon as a
waiver is finalised and release to the market copy of the prospectus, and
post a copy on its website, promptly after registration; and
(d) Letters of entitlement and the prospectus be sent by fast post to those
outside Auckland (being the place EBO's share registrar/mail house are
located).
Reasons
10. In coming to this decision, NZXR has considered the following matters: ?
(a) Due to commercial reasons, the Vendor requires the Acquisition to settle
on 5 July 2013. Requiring EBO to meet the timetable requirements in the Rules
could jeopardise completion of the Acquisition by that date. As the
Entitlement Offer will only proceed if shareholders approve the Acquisition,
the Entitlement Offer cannot open any earlier than 17 June 2013;
(b) EBO's shareholders and the market are already aware that EBO intends to
undertake the Entitlement Offer. The notice of meeting distributed to EBO
shareholders on 29 May 2013 includes an indicative timetable for the
Entitlement Offer and states that the offer will be made on a 7 for 20 basis.
Shareholders will therefore have time to consider their possible entitlements
and make any relevant decisions in respect of their prospective entitlements
prior to the Entitlement Offer opening;
(c) Although shareholders will have two fewer days to trade or otherwise deal
with their rights, providing additional time for payments to clear will
ensure that shareholders' applications are accepted, and that they are able
to participate in the Entitlement Offer;
(d) The condition that EBO send the Entitlement Offer prospectus by way of
fast post to those outside Auckland ensures that shareholders will receive
these as soon as possible, and therefore be aware of their entitlements, as
soon as practicably possible;
(e) There is precedent for this decision.
ENDS.
End CA:00237086 For:EBO Type:WAV/RULE Time:2013-06-06 08:30:08
