Waiver from NZX Listing Rules

NZX Regulation Decision
Investore Property Limited (“IPL”)
Application for a waiver from NZX Listing Rule 5.2.1 and
limb (a) of the definition of "Share Purchase Plan"






29 April 2020

NZX REGULATION DECISION – 29 April 2020
2 of 7

Background
1. The information on which this decision is based is set out in Appendix One to this decision.
This waiver will not apply if that information is not or ceases to be full and accurate in all
material respects.
2. The Rules to which this decision relates is set out in Appendix Two to this decision.
3. Capitalised terms which have not been defined in this decision have the meanings given to
them in the Rules.
Waiver from Listing Rule 5.2.1 and limb (a) of the
definition of Share Purchase Plan
Waiver from Rule 5.2.1
4. Subject to the conditions set out in paragraph 5 below, and on the basis that the information
provided by IPL is complete and accurate in all material respects, NZX Regulation (NZXR)
grants IPL a waiver from NZX Listing Rule (Rule) 5.2.1, to the extent that this Rule would
otherwise require IPL to obtain the approval of shareholders to enter into a Material
Transaction with Related Parties.
5. The waiver in paragraph 4 above is provided on the conditions that:
a. IPL’s Directors, excluding any Director who is an Associated Person of any of the Related
Parties, certify to NZX that:
i. IPL was not unduly influenced in its decision to undertake the Placement by the
Related Parties;
ii. the Related Parties who participate in the Placement will not be involved in, or
influence, any allocation decision in relation to the Placement; and
iii. the Related Parties will derive no benefit as a result of the Related Party
relationship, other than solely through participation in the Placement on the same
terms and conditions as all other Equity Security holders or as participants in the
Placement on commercial terms; and
b. the waiver, its conditions and its implications are disclosed in IPL’s annual report for the
financial year ending 31 March 2021.
Reasons
6. In coming to the decision to provide the waiver set out in paragraph 4 above, NZXR has
considered that:
a. The policy of Rule 5.2.1 is to ensure that a Related Party does not exercise undue
influence or use personal connections to reach a favourable outcome for, or a transfer of
value to, the Related Party in respect of a transaction and that shareholders are given an
opportunity to review transactions where the board may have been subject to actual or
perceived influence from a Related Party.
b. IPL submits, and NZXR has no reason not to accept, that these circumstances do not
offend the policy behind Rule 5.2.1 because:
i. the Related Parties have not influenced IPL’s choice of structure for the Placement,
which has been determined by the IPL Board in light of advice received from its
advisers;

NZX REGULATION DECISION – 29 April 2020
3 of 7

ii. the pricing and allocation decisions for the Placement will be managed by the
Independent Directors of IPL in conjunction with the lead arranger and underwriter
for the Placement. Accordingly, the Related Parties will have no influence over the
pricing or allocation decisions in the Placement; and
iii. the participation of the Related Parties who do participate in the Placement will be
on the same basis and terms as all other Placement participants and so there is not
transfer of value to those Related Parties;
iv. the Rules already contemplate that an issue of Financial Products is not a Material
Transaction with a Related Party requiring approval of shareholders in accordance
with Rule 5.2.1 if:
A. the Issuer gives each holder of Financial Products of the Class in question the
opportunity to receive the same benefit in respect of each Financial Product
held (except to the extent that an issue excludes holders outside New Zealand
in accordance with Rule 4.4.3(e)); or
B. the Equity Securities are issued by an Issuer under an Accelerated Offer.
v. the existing relationships between IPL and the Related Parties are unlikely to
influence the decision of the Independent Directors of IPL in undertaking the
Placement;
c. the reason the Placement will potentially be a considered a Material Transaction under
the Rules is due to the need to aggregate the participation of all Related Parties. This
aggregation is due to the potential for Related Parties to exercise undue influence over
an Issuer. NZXR has no reason to believe that SPL, ANZ, and Salt are each acting
together to influence IPL to undertake the Offer. If each of the Related Parties’
participation in the Placement was considered individually, the issuance of shares under
the Placement would not be a Material Transaction under the Rules; and
d. there is precedent for this decision.
Waiver from limb (a) of the definition of "Share Purchase Plan"
7. Subject to the conditions set out in paragraph 8 below, and on the basis that the information
provided by IPL is complete and accurate in all material respects, NZX Regulation (NZXR)
grants IPL a waiver from the definition of "Share Purchase Plan", to the extent that this
definition would prevent IPL from accepting applications in excess of $50,000 per registered
holder (or, in the case of Equity Securities held through a custodian, each beneficial owner)
in any 12-month period.
8. The waiver in paragraph 7 above is provided on the conditions that:
a. the consideration payable for the Equity Securities issued in the SPP does not exceed
$50,000 per registered holder (or, in the case of Equity Securities held through a
custodian, each beneficial owner); and
b. the waiver, its conditions and its implications are disclosed in IPL’s annual report for the
financial year ending 31 March 2021.
9. The waiver in paragraph 7 above shall only apply to the SPP and not to any other offer made
by IPL.
Reasons
10. In coming to the decision to provide the waiver set out in paragraph 7 above, NZXR has
considered that:

NZX REGULATION DECISION – 29 April 2020
4 of 7

a. The policy of the 12 month requirement in the definition of "Share Purchase Plan" is to
prevent minority shareholders from being diluted through multiple offers.
b. IPL submits, and NZXR has no reason not to accept, that in this case these
circumstances do not apply to the SPP because:
i. the offer structure comprising a Placement and SPP was determined by the IPL
Board to be the optimal capital raising structure for IPL and its shareholders at this
time and was a structure which provided genuine benefits for IPL's shareholders
(over a Rights offer or Accelerated offer);
ii. the SPP is intended to be fair to minority shareholders by providing a mechanism
to mitigate the dilutionary impacts of the Placement;
iii. an SPP offer amount of up to $50,000 per registered holder (or beneficial owner)
permits almost all (approximately 98%) of IPL's shareholders to participate in the
SPP to a level which at least maintains their pre-Offer holding; and
iv. permitting IPL to offer up to $50,000 per registered holder (or beneficial owner) in
the SPP (as opposed to requiring IPL to "top-up" the ability for shareholders to make
applications through use of placement capacity) is a simpler offer structure and is
easy for shareholders to understand.
c. Whilst there is potentially no precedent for this decision, the waiver is an appropriate
response, and is only required, given the unique circumstances currently subsisting in
New Zealand and globally due to COVID-19.
Confidentiality
11. IPL has requested that this decision be kept confidential until IPL releases an announcement
relating to the Offer.
12. In accordance with Rule 9.7.2, NZXR grants IPL’s request.

NZX REGULATION DECISION – 29 April 2020
5 of 7

Appendix One
1. Investore Property Limited (IPL) is a Listed Issuer with ordinary shares quoted on the NZX
Main Board.
2. IPL is considering undertaking a potential equity capital raise, which will be undertaken by
way of a placement to existing and new institutional investors under Listing Rule 4.5.1
(Placement) and a share purchase plan under Listing Rule 4.3.1(c) (Share Purchase Plan,
with the Placement, the Offer). IPL had been advised that, due to market conditions, the
significant volatility experienced in New Zealand and globally, and potentially other capital
raisings coming to market, the current time presents the optimal window for a capital raising
to be launched.
3. IPL previously undertook an equity capital raise in November 2019 by way of placement and
share purchase plan (the Previous Offer). The issue of shares under that placement was
ratified by IPL's shareholders on 16 January 2020. At that time IPL did not consider that it
would undertake a second share purchase plan within 12 months.
Material Transaction with Related Parties
4. IPL has three major shareholders which may be “Related Parties” as holders of more than
10% of IPL’s shares (per limb (b) of the definition of “Related Party”), being:
a. Stride Property Limited (SPL), which holds 19.4% of IPL’s shares;
b. ANZ New Zealand Investments Limited and ANZ Bank New Zealand Limited (aggregated
as related bodies corporate (together, ANZ)) which holds 11.242% of IPL's shares (based
on the most recent disclosure); and'
c. Salt Funds Management Limited (Salt), which holds 9.4% of IPL’s shares, but which held
10.209% of IPL's shares in the six-month period prior to launch of the Offer.
5. On a pro-rata basis, the aggregate value of shares issued to SPL, ANZ and Salt would not be
more than 10% of IPL's Average Market Capitalisation (based on an $85 million Placement,
the total pro-rata allocation to those shareholders would be approximately $34 million).
However, IPL wishes to be able to have the flexibility to "overallocate" to those shareholders
if required (for example, under sub-underwriting arrangements or placement allocations).
6. The pricing and allocation determinations under the Placement will be made between the lead
arranger and the Independent Directors of IPL, in accordance with the terms of a placement
agreement to be entered into between those parties prior to the launch of the Offer.
7. The market value of the shares issued to each of SPL, ANZ and Salt under the Placement
(and, therefore, the aggregate amount) will not be known until the completion of the
Placement. Accordingly, the market value of IPL’s shares issued to these Related Parties in
the Placement may exceed 10% of IPL's Average Market Capitalisation, which was $517,
383, 747 as at 28 April 2020.
8. Limb (b) of the definition of Material Transaction requires that IPL consider the aggregate
amount of shares being issued to all Related Parties that participate in the Placement when
determining whether shareholder approval of a related party transaction is required.
Share Purchase Plan
9. Under the retail offer component of the Previous Offer, IPL accepted applications for new
shares from certain of its shareholders under Listing Rule 4.3.1(c), up to a maximum of
$15,000 per application.
10. Under limb (a) of the definition of Share Purchase Plan, IPL is only able to accept applications
for up to $50,000 (in reliance on the class ruling and waiver released by NZX on 19 March
2020) per registered shareholder (or beneficial owner) in any 12-month period. Because IPL

NZX REGULATION DECISION – 29 April 2020
6 of 7

accepted applications in the retail offer component of the Previous Offer for up to $15,000
per registered holder (or beneficial owner), absent this waiver IPL would only be able to
accept applications for a maximum of $50,000 per registered holder (or beneficial owner) in
the SPP, less the value of shares issued to that registered holder (or beneficial owner) under
the share purchase plan component of the Previous Offer.

NZX REGULATION DECISION – 29 April 2020
7 of 7

Appendix Two

Share Purchase Plan
1
means an offer of Equity Securities to all holders of existing Equity
Securities of the Issuer carrying Votes (subject to Rule 4.4.1(e))
where:

(a) the consideration payable for the Equity Securities issued does
not in any 12 month period exceed $50,000 per registered
holder (or, in the case of Equity Securities held through a
custodian, each beneficial owner),

(b) the number of Equity Securities to be issued does not exceed
30% of the Class of Equity Securities already on issue at the
time the offer is made which are fully paid and entitle the holder
to Vote, and

(c) the Offer Document contains a term to the effect that, if
oversubscribed, oversubscriptions will be accepted (subject to
paragraph (b) above or such lower limit as contained in the Offer
Document) or acceptances will be scaled having regard to the
number of fully paid Equity Securities carrying Votes held by
those accepting the offer either on Record Date or the closing
date of the offer (and which date is relevant must be specified in
the Offer Document).

Rule 5.2.1 Transactions with Related Parties

Rule 5.2.1 An Issuer must not enter into a Material Transaction if a Related Party is, or is
likely to become:

(a) a direct party to the Material Transaction, or

(b) a beneficiary of a guarantee or other transaction which is Material Transaction,

unless that Material Transaction is approved by an Ordinary Resolution (such
resolution being subject to the voting restrictions in Rule 6.3) or conditional on such
approval.

1
As amended pursuant to the NZX Regulation Class Waiver and Ruling in relation to Section 4 of the NZX
Listing Rules dated 19 March 2020, which can be found here: https://www.nzx.com/regulation/class-
waivers-and-rulings.