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Kapiti resolution to support tender process

Kapiti resolution to support tender process

The Board of Kapiti Cheeses Ltd is recommending shareholders approve a special resolution lowering the threshold at which a bidder can acquire all shares in the Company. The resolution, which has the support of the Company’s cornerstone shareholder, Rangatira Ltd, would reduce the threshold at which compulsory acquisition provisions take effect from 90% to 75%.

Chairman John Butterfield said the resolution will be put to shareholders at a Special General Meeting on Friday 22 August. He said the resolution would assist in maintaining the integrity of the tender process already underway, treat all bidders equally and enable all shareholders to maximise the value of their shares. The tender process involving a number of potential bidders for all the shares in the Company is now at an advanced stage.

The special resolution was prompted by the recent move by New Zealand Dairy Foods Holdings Ltd (NZDF) to acquire 10.3% of the shares in the Company at a price of $3.75 each. The move by NZDF, which chose not to be part of the tender process, has the potential to frustrate the intended outcome of the process.

Rangatira Ltd Chief Executive Ian Frame confirmed today that Rangatira, which holds 38% of the Company’s shares, had not sold any shares. Mr Frame said Rangatira is supporting the tender process and intends to vote in favour of the special resolution.

Mr Butterfield said the resolution would enhance the potential of the tender process to bring about an offer that the Board could recommend to all shareholders. It would also give greater certainty to those bidders working within the tender process and to the overall contestability of the process.

Mr Butterfield said the Board was encouraging all shareholders to vote at the meeting.

Shares have been trading recently on the unlisted market in a range around $5.00.

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