Statement of reasons

This notice applies to acts or omissions occurring on or after 31 March 2013 and is revoked on the close of 31 March 2014.

Sanford Limited (Sanford) is a code company within the meaning of the Takeovers Code (the Code) because it is party to a listing agreement with NZX. Amalgamated Dairies Limited (ADL) and its associates hold or control 60.08% of the voting rights in Sanford. ADL and its associates (the group) are ultimately owned or controlled by or for the benefit of the Goodfellow family and their connected entities. Certain entities within the group, and members of the Goodfellow family (in their individual capacities), hold voting rights in Sanford.

The group intends to undergo a reorganisation that will affect 2 trusts that hold shares in Sanford (the reorganisation).

The 2904 Charitable Trust (the 2904 Trust) is a trust established for charitable purposes and holds and controls 4 574 870 Sanford shares (representing 4.89% of the voting rights in Sanford).

In the reorganisation, CAZNA (2904) Limited (CAZNA) will replace the New Zealand Guardian Trust Company Limited as a trustee of the 2904 Trust. The 2904 Trust is not a family trust and, therefore, cannot rely on the Takeovers Code (Trustees of Family Trusts) Exemption Notice 2012.

Judith Ann Goodfellow holds and controls 37 702 Sanford shares (representing 0.04% of the voting rights in Sanford). As part of the reorganisation, Judith Ann Goodfellow will transfer those shares to William Douglas Goodfellow, in his capacity as trustee of the JAG Trust. The JAG Trust is for the benefit of Judith Ann Goodfellow, William Douglas Goodfellow, and their sons William Bruce Goodfellow and Peter John Goodfellow.

The Takeovers Panel (the Panel) has granted exemptions to—

• CAZNA from rule 6(1) of the Code in respect of any increase in its voting control in Sanford as a result of its appointment as the new trustee of the 2904 Trust; and

• William Douglas Goodfellow from rule 6(1) of the Code in respect of the transfer of shares from Judith Ann Goodfellow to him in his capacity as trustee of The JA Goodfellow Trust (the JAG Trust).

The Panel considers that the exemption granted to CAZNA in respect of the 2904 Trust is appropriate and consistent with the objectives of the Code because—

• the appointment of CAZNA as trustee of the 2904 Trust relates to a change of the trustee of a charitable trust in accordance with its trust deed, and the Code is not intended to inhibit the governance arrangements of charitable trusts if those arrangements have no real effect on the shareholders of Sanford; and

• the shareholders of Sanford are not disadvantaged by not having an opportunity to vote on the appointment of CAZNA as a trustee of the 2904 Trust because the change has no real effect on those shareholders; and

• the exemption avoids unnecessary compliance costs that would be incurred if it were not granted.

The Panel considers that the exemption granted to William Douglas Goodfellow in respect of the JAG Trust is appropriate and consistent with the objectives of the Code because—

• the transfer from Judith Ann Goodfellow to her husband, William Douglas Goodfellow, in his capacity as trustee of the JAG Trust, is a private transaction between Judith Ann Goodfellow and her family trust established for the benefit of that shareholder, William Douglas Goodfellow, and their sons; and

• the transfer is a one-off transaction of a small percentage of shares as part of a reorganisation of a family’s investment in Sanford that has no real effect on the shareholders of Sanford; and

• the Code was not intended to regulate private transactions that have no real effect on other shareholders; and

• the shareholders of Sanford will not be disadvantaged in not having the opportunity to vote on the transfer because the transfer has no real effect on those shareholders.