Irish Continental Group plc (“ICG”)
Moonduster Limited (“Moonduster”)
On 14 June 2007 the independent directors of ICG and Moonduster released a Rule 2.5 announcement setting out the terms of a scheme of arrangement to be put before ICG shareholders (“Scheme”). The announcement states that the implementation of the Scheme is conditional inter alia upon it becoming effective by not later than 31 October 2007 (“Long-Stop Date”) or such later date as Moonduster, ICG and the High Court may agree, failing which the Scheme will lapse.
The cash consideration payable pursuant to the Scheme was €22.00 per ICG Unit. Between 20 September and 26 September, 2007 Moonduster purchased ICG Units at various prices up to €25.40 and consequently, the cash consideration payable pursuant to the Scheme increased to €25.40.
Subsequent to the aforementioned purchases of ICG Units by Moonduster, the independent directors of ICG requested the Panel to inter alia (i) direct Moonduster to amend the Long-Stop Date to allow the Scheme to be implemented and (ii) direct Moonduster to cooperate in a full and timely manner so as to allow the Scheme to be put before ICG shareholders at the earliest possible opportunity.
Under Rule 2.7 of the Takeover Rules, as amended for schemes, Moonduster has an obligation to proceed with the Scheme unless the Panel consents otherwise. As Panel consent in this regard has neither been sought or granted in relation to the Scheme, Moonduster is required under the Rules to proceed with the Scheme. However, the Panel has taken the view that Rule 2.7 should be interpreted within the parameters of what has been agreed between Moonduster and the independent directors of ICG. Specifically and as referred to above, in this case the parties expressly agreed that the implementation of the Scheme is conditional inter alia upon it becoming effective by not later than 31 October 2007 or such later date as they and the High Court may agree, failing which the Scheme will lapse. The condition containing the Long-Stop Date is in the Panel’s view for the benefit of each of the parties and the shareholders of ICG. The Long-Stop Date cannot be unilaterally abandoned or varied without the consent of Moonduster and ICG. Having regard to the likely timeframe necessary for the Scheme to become effective, implementation of the Scheme now requires both parties and the High Court to agree to extend the Long-Stop Date.
Section 9(2)(a) of the Irish Takeover Panel Act 1997 empowers the Panel to give a direction to any party to a takeover to do anything which the Panel specifies in the direction for the purposes of ensuring compliance with the General Principles.
In their submissions to the Panel, the independent directors of ICG contended, inter alia, that the effect of General Principle 1 and 2 is to oblige Moonduster to amend the Long-Stop Date. General Principle 1 states, inter alia, that all holders of the securities of an offeree of the same class must be afforded equivalent treatment while General Principle 2 states inter alia that the holders of the securities of an offeree must have sufficient time and information to enable them to reach a properly informed decision on the offer. The Panel considers that General Principle 1 and 2 do not have the effect contended by the independent directors of ICG as the Scheme has not yet been put before shareholders. Consequently, the Panel decided not to accede to the requests of the independent directors of ICG.
In the event that ICG, Moonduster and the High Court do not agree to extend the Long-Stop Date, the Scheme will lapse at midnight on 31 October 2007 following which the ICG offer period will expire.
