IRISH TAKEOVER PANEL
Panel Ruling
Dunloe Ewart plc (“Dunloe”)
On 14 November, 2002 the Panel was informed that an agreement existed between Mr. Noel Smyth and Mr. Paschal Taggart whereby Mr. Taggart agreed, subject to Panel consent, to acquire shares held by Mr. Smyth and his immediate family representing 26.1% of the issued share capital of Dunloe. Following the Panel ruling of 15 November permitting Valdot Limited not to proceed with its offer for Dunloe, Panel consent was not necessary for the completion of this transaction.
On 18 November the Panel was formally notified of the purchase by Mr. Taggart of shares representing approximately 27.1% of the share capital of Dunloe comprising shares held by Mr. Smyth, companies wholly owned and controlled by Mr. Smyth and his immediate family and five other individuals. The aggregated shareholding of these latter five individuals represented approximately 0.9% of the issued share capital of Dunloe.
Rule 4(a) of the of the Irish Takeover Panel Act, 1997, Substantial Acquisition Rules, 2001 (“the SARs”) prohibits any person, subject to certain exceptions set out in Rule 5, from making a substantial acquisition of securities. The exceptions in Rule 5 include, inter alia, an acquisition of securities from a single holder. The single holder exception was the relevant exception which permitted Mr. Taggart under the SARs to acquire, in a single transaction, shares representing 15% or more but less than 30% of the share capital of Dunloe. The single holder exception permits inter alia purchases of securities from immediate family members or from companies wholly owned and controlled by members of that immediate family.
On 22 November the Panel ruled that the purchase by Mr. Taggart of the shares held by the aforementioned five individuals constituted a breach of Rule 4 of the SARs as such purchases did not fall within the single holder exception in Rule 5. However, cognisant of the fact that the Panel had been informed that Mr. Taggart was acquiring 26.1% of the share capital of Dunloe and that this fact had been published, the Panel does not consider in the overall context of the transaction that the purchase of the aggregate shares held by these five individuals is so material as to warrant a sell-down by Mr. Taggart of such shares.