Goodman Fielder 02 – Panel Accepts Undertaking from Goodman Fielder in Declining Burns Philip Application [06/02/2003] The Takeovers Panel

06 February 2003

PANEL ACCEPTS UNDERTAKING FROM GOODMAN FIELDER IN DECLINING BURNS PHILP APPLICATION

The Takeovers Panel announces that it has today accepted the offer of undertakings from Goodman Fielder in relation to the application by BPC1 Pty Ltd and Burns Philp Co Ltd for a declaration of unacceptable circumstances and orders in relation to the affairs of Goodman Fielder Ltd. BPC1 is currently bidding for Goodman Fielder. It made the application on 20 January 2003.

On the basis of the undertakings from Goodman Fielder in relation to several of the matters raised by Burns Philp in its application, the Panel declined to make the declaration or orders requested. Under the undertakings, Goodman Fielder will publish a supplementary target's statement and advertisements containing additional and corrective information.

The advertisements and the supplementary target's statement will contain additional information about the companies used by Goodman Fielder in bar charts that Goodman Fielder had published in previous advertisements and in its target's statement. The bar charts were of comparative trading and acquisition multiples in transactions which Goodman Fielder has asserted are comparable to an acquisition of Goodman Fielder. The advertisements and target's statement will contain a statement that the bar charts and additional information should not be relied on as a valuation of shares in Goodman Fielder.

The supplementary target's statement will also contain:

  • fuller information in relation to the Goodman Fielder directors' forecast of the company's earnings for the current financial year,
  • a plain English explanation of the limited scope of the review of that forecast provided by Ernst & Young and
  • the identity of the experts who provided Goodman Fielder with the advice mentioned in paragraph 6.3 of its target's statement that it should have no additional tax liability in relation to the dispute with the Australian Tax Office which it disclosed to the market on 8 January 2003.

The Panel has declined to order Goodman Fielder to provide additional information to Burns Philp in relation to the Accounting Conditions in the bid or to provide Burns Philp with access to non-public information similar to that given to prospective rival bidders. The Panel found no grounds to override Goodman Fielder's right to choose to whom and on what terms to provide access to its proprietary information in the best interests of Goodman Fielder and its shareholders. The supplementary target's statement will, however, provide an explanation of Goodman Fielder's decision not to give Burns Philp access.

A copy of the undertakings is attached.

The sitting Panel comprises Ilana Atlas (sitting President), Michael Tilley and Marian Micalizzi.

Nigel Morris,
Director, Takeovers Panel
Level 47 Nauru House,
80 Collins Street,
Melbourne VIC 3000
Ph: +61 3 9655 3501
nigel.morris@takeovers.gov.au

Takeovers Panel

In the matter of Goodman Fielder Limited (No 2)

Undertaking by Goodman Fielder Limited

Background

The undertaking set out below relates to the off-market takeover bid by BPC1 Pty Limited (Burns Philp ) for all the issued ordinary shares in Goodman Fielder Limited (Goodman Fielder ) in respect of which a bidder's statement was lodged with ASIC on 19 December 2002 and a target's statement was lodged with ASIC on 17 January 2003.

Undertaking

Pursuant to s201A(1) of the Australian Securities and Investments Commission Act 2001, Goodman Fielder undertakes to the Takeovers Panel that it will:

1. issue no later than 14 February 2003 (or such later date as is approved by the Panel) a supplementary target's statement and send it to Goodman Fielder shareholders as soon as possible after issuing it, which shall be approved by the Panel before publication (supplementary target's statement );

2. set out in the supplementary target's statement the same data about the comparisons with other companies as are set out in the tables in section 4.3 of the Goodman Fielder submissions lodged with the Panel on 28 January 2003. The comparison companies will be grouped in the same way as in the tables of acquisition and trading multiples on pages 18 and 19 of the target's statement. The supplementary target's statement will state that the tables are not a valuation of Goodman Fielder shares and should not be relied upon as a valuation;

3. set out in the supplementary target's statement:

(a) disaggregated forecast financial information for the financial year to 30 June 2003, separately stating half year actual results to 31 December 2002;

(b) who prepared the earnings forecast in the target's statement;

(c) the qualifications of those persons who prepared the earnings forecast in the target's statement;

(d) the nature of the data and the methods used to compile the earnings forecast;

(e) an express statement that the directors are satisfied that the forecast is based on events and actions that the directors believe on reasonable grounds will take place; and

(f) a statement why the directors believe the assumptions are reasonable;

4. set out in non-technical language in the supplementary target's statement how limited the Ernst & Young review is and why such a limited report was obtained. In particular, the supplementary target's statement will explain that the Ernst & Young review should not be taken as a full review of the forecast and that Ernst & Young have reviewed the compilation of the forecast and its compliance with accounting standards, but not the reasonableness of the earnings forecast itself or of the assumptions and data used in the preparation of the earnings forecast;

5. state in the supplementary target's statement why Goodman Fielder has given access to potential rival bidders, but not to Burns Philp;

6. state in the supplementary target's statement the names and consents of the experts who provided the tax advice referred to in part 6.3 of the target's statement;

7. as soon as possible, and no later than Saturday 15 February, publish advertisements of the same size as the 18 January advertisements and in the same sections of the paper as the 18 January advertisements appeared (if the advertisements are published in the Saturday papers), or in the business sections (if the advertisements are published in a weekday or Sunday paper), of each newspaper in which the 18 January advertisements appeared, and announce the same text to ASX;

8. the advertisements will be approved by the Panel before publication. The advertisements will use the term "additional and corrective information" and include the information and statement referred to in paragraph 2 above, to the extent that those tables formed part of the 18 January advertisements. They will also state that the tables are not a valuation of Goodman Fielder shares and should not be relied upon as a valuation;

9. not publish any other advertisements concerning the same subject-matter as the 18 January advertisement unless they include the same information referred to in paragraph 8 above; and

10 provide a copy of the Staff Video to the Panel by 10 February 2003 and take such action in relation to the Staff Video as the Panel requires.

DATED: [*] February 2003

SIGNED FOR AND ON BEHALF OF )
GOODMAN FIELDER LIMITED )

Director