Bidder rapped over takeover special deal

An attempt to offer some shareholders a special deal in a takeover of New Image Group has brought bidder Graeme Clegg a slap from the Takeovers Panel.

Clegg, chairman and majority shareholder of NZX-listed New Image, has offered 26c a share for the 30 per cent of the company he does not already own.

Late this afternoon, the company disclosed that Clegg had gone to selected shareholders this month and offered them a chance to buy shares in his takeover vehicle, New Image Trustee, after the takeover was completed.

The panel said the selective deal, offered to shareholders who were employees or distributors of the company's products, may be inconsistent with the Takeovers Code, which requires all shareholders to be offered the same terms.

In a statement, New Image Trustee said it had chosen not to contest the panel's view and promised formally to contact all shareholders affected and formally withdraw the selective offer.

"NITL will declare invalid all acceptances given on the basis of the differing offer and advise affected New Image shareholders that they may, if they choose, accept the offer on the terms set out in NITL's offer document dated February 1, 2013," it said.

New Image makes and sells health supplements through multi-level marketing networks.

The takeover closes on May 1. New Image shares were quoted on the market at 25c today, giving the company a market capitalisation of $59 million.

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