Tri City, a syndicate established by Farmers Mutual Group (FMG) owns a number of supermarkets throughout New Zealand which have Big Fresh as the anchor tenant.

FMG recently sold its 58% stake in the syndicate to Dominion and now Dominion is making an offer for the units it didn’t own.

However the Takeovers Panel is questioning whether the offer complies with the takeovers code.

In the offer made on December 2 Dominion offered $475 for each bond. However three days later it sent out another letter stating that the additional cash amount was incorrect.

“The amount of interest that will be accrued but unpaid on each bond as at 31 December 2003 will be $118.75. This is the amount of the final quarterly interest payment due in respect of each bond and represents the balance of the $475 annual interest. Therefore, for acceptances received at any time on or prior to 31 December 2003 the additional cash amount…will be $118.75 and not $475.”

The Panel says that Dominion may have breached the code by either failing to adequately specify the consideration payable under the takeover offer; and by sending the letter to Tri-City security holders stating that the additional cash sum for acceptances received on or prior to 31 December 2003 would be $118.75 rather than $475.

It plans to hold a private meeting in Wellington on December 17. Any Tri-City shareholder who wishes to attend should contact the panel.