Independent News & Media plc (“the Company” or “Independent”)
Under the Takeover Rules the directors of a relevant company are presumed to be acting in concert whilst the directors of that company propose to redeem or purchase its own shares.
On 26 June, 2002, Independent commenced a share purchase scheme to buy back shares in the market. As a result of share purchases by the Company between 26 June and 11 October, 2002 the aggregate shareholding of the directors of Independent (“the Board”) increased from 29.6% to 30.2%. As a consequence of the increase in their aggregate percentage shareholding, the Board was under an obligation under Rule 37(a) to make a general offer to all shareholders.
The Panel considered on 29 October, 2002 a submission from Independent which set out, inter alia, the circumstances which gave rise to the Rule 37(a) obligation. The submission requested the Panel to grant a waiver of the Rule 37(a) obligation on the basis that the Board had incurred the obligation due to an inadvertent mistake. The Panel accepted this explanation and in these circumstances the Panel decided to waive the Rule 37(a) obligation provided sufficient shares were sold by the Company within a limited period so as to reduce the aggregate shareholding of the Board below 30% and the Company was so informed.
Prior to the Panel’s decision being complied with, the Panel was advised by the Company, of the intention of two directors of the Company, Mr. McGuinness and Mr. Palmer (who in aggregate hold approximately 6.75 million Independent shares representing approximately 1.2% of the issued share capital of the Company) to retire from the Board. The Panel was further informed by the Company that Mr. McGuinness had indicated in June, 2002 his intention to retire and has recently retired from the Company and any subsidiaries and associated companies in which he held directorships. The Panel was also informed that Mr. Palmer had indicated his intention to retire from the Company in March 2002 and has recently retired from the Company and any subsidiaries and associated companies in which he held directorships. The information relating to the proposed retirements had not been furnished to the Panel when it had considered Independent’s submission on 29 October. The intentions of these directors were relevant and should in the opinion of the Panel have been communicated prior to the Panel’s decision on 29 October.
The consequential effect of the retirement of these directors of the Company is that the current aggregate shareholding of the Board has been reduced below 30%. In these circumstances, the Panel is of the opinion that as Messrs. McGuinness and Palmer are no longer involved as directors and in the management of Independent or its subsidiaries, it is not now appropriate to require the Company to implement the Panel’s decision of 29 October.
The Panel wishes to emphasise the importance of all relevant information being furnished to it by a party in a timely manner prior to the making of any decision by the Panel.
