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26 Jun 2015
News

Disclosure Document Relating to the Acquisition of the Company’s Shares


Disclosure Document Relating to the Acquisition of the Company’s Shares

(Companies Act 1993, sections 61(5) and 62)

To: All shareholders of the Company

INTRODUCTION

This document is provided to all shareholders in accordance with the requirements set out in sections 61(5) and 62 of New Zealand’s Companies Act 1993 (Companies Act). It sets out details of the intention of the Company to offer to acquire certain shares in the Company from the trustee of the Company’s salary sacrifice scheme that is available to selected employees.

SALARY SACRIFICE SCHEME

Under the salary sacrifice scheme (the SSS) adopted by the Company in June 2014, participants are entitled to purchase a specified number of shares in the Company by taking out an interest free loan provided by the Company and paying it off in equal monthly instalments by deductions from their regular net remuneration over a specified period. Serko Trustee Limited (the Trustee) is trustee of the SSS and holds certain ordinary shares in the Company pending their allocation to participants pursuant to the SSS. The Directors have authorised the Company making an offer to acquire such shares.

ACQUISITION OF SHARES

Such matters constitute the acquisition of the Company’s shares in terms of the Companies Act.

The directors have authorised the Company to make an offer to acquire 9,000 ordinary shares issued by the Company (the SSS Shares) from the Trustee, such shares being Unallocated Shares (as that term is defined in the trust deed relating to the SSS), at the issue price of each of the SSS Shares.

No director has any interest in the shares which are the subject of the acquisition. The Board will not make the offer to acquire the SSS Shares if:

  1. (a)  it is no longer satisfied that the Company will satisfy the solvency test set out in the Companies Act after the offer to acquire is made; or

  2. (b)  the Board ceases to be satisfied that:

    1. (i)  the acquisition is of benefit to the remaining shareholders or in the best interests of the company;or

    2. (ii)  the terms and conditions of the offer and the consideration offered for the shares are fair and reasonable to the remaining shareholders or the company; or

  3. (c)  the Board becomes aware of any information that will not be disclosed to shareholders:

    1. (i)  which is material to an assessment of the value of the shares; and

    2. (ii)  as a result of which the terms of the offer and consideration to be offered for the shares are unfair to shareholders accepting the offer.

BOARD RESOLUTION

On 23 June 2015, Serko's Board resolved to make an offer to acquire the SSS Shares. The full text of the Board resolution relating to the authorisation of the Company to acquire its own shares pursuant to sections 61(5) and 62 of the Companies Act is set out below:

That:

  1. The Company send to each shareholder a disclosure document as required by section 61(5) of the Companies Act 1993.

  2. Not less than 10 working days and not more than 12 months after the disclosure document has been sent to each shareholder, the Company make an offer to acquire the SSS Shares at the issue price of each of the SSS Shares.

  3. The acquisition of the SSS Shares is in the best interests of the Company.

  4. The acquisition of the SSS Shares is of benefit to the shareholders to whom the offer is not made.

  5. The terms of the offer and the consideration offered for the SSS Shares are fair and reasonable to:

    1. (a)  the Company; and

    2. (b)  the shareholders to whom the offer is not made.

  6. The board is not aware of any information that will not be disclosed to shareholders:

    1. (a)  which is material to an assessment of the value of the SSS Shares; and

    2. (b)  as a result of which the terms of the offer and consideration for the SSS Shares are unfair to shareholders accepting the offer.

  7. Pursuant to section 52 of the Companies Act 1993, the board authorises a distribution to each shareholder accepting the offer in the

    amount of the consideration payable to that shareholder for the SSS Shares acquired from that shareholder under the offer.

  8. Having regard to:

    1. (a)  the most recent financial statements of the Company that comply with section 10 of the Financial Reporting Act 1993; and

    2. (b)  all other circumstances that the directors know affect, or may affect, the value of the Company's assets and the value of the

      Company's liabilities, including its contingent liabilities,

    the board is satisfied that the Company will, immediately after the SSS Shares are acquired, satisfy the solvency test set out in section 4 of the Companies Act (as modified by section 52(4) of the Companies Act) as:

(c) the Company will be able to pay its debts as they become due in the normal course of business; and

(d) the value of the Company's assets will be greater than the value of its liabilities including contingent liabilities.
9. The SSS Shares that the Company holds in itself pursuant to the above acquisition are cancelled from the date on which they are

acquired.

REASONS FOR DIRECTORS’ CONCLUSIONS IN RELATION TO SHARE ACQUISITION RESOLUTIONS

The reasons for the directors’ conclusions in the resolutions concerning the acquisition of shares in respect of the SSS are:

  1. (a)  it is not currently anticipated that the SSS Shares will be allocated under the SSS in the immediate future;

  2. (b)  the proceeds of such sale (net of any tax liability and transaction costs) are to be provided back to the Company as final

    repayment of the trustee loan under which the Trustee funded the acquisition of the SSS Shares pursuant to the trust deed of the

    SSS and any residual trust property is to be distributed to the Company as a beneficiary of the SSS trust;

  3. (c)  the acquisition and cancellation of the SSS Shares is a part of facilitating the SSS which increases the alignment of interests

    between participating employees and shareholders;

  4. (d)  the acquisition price is the same as the original issue price for each of the SSS Shares; and

  5. (e)  the SSS Shares will be cancelled by the Company immediately upon completion of the acquisition.

SHAREHOLDER RIGHTS

Section 61(8) of the Companies Act 1993 confers on shareholders and the Company certain rights to apply to the court to restrain the proposed acquisition.

The offer to acquire may be given by the Company not less than 10 working days nor more than 12 months after this document has been sent to each shareholder.

Dated: 26 June 2015

Simon Botherway

Chairman


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