By Evarist Baimu Nyaga Mawalla - Home

unconditional and they did so procure by purchasing shares at a price 12.2p in excess ofthe cash price offered by Norton Opax and by assenting those shares to Norton Opax. (c)Having regard to the timing and price paid by K.I.O for the Mc Corquodale shares, thefact that they were purchased through one of the brokers to Norton Opax’s offer and theassenting of those shares to that offer, the panel could not properly have failed to find thatK.I.O and Norton Opax were concert parties unless it misdirected itself in law in theerroneous belie that a finding that there was communication between Norton Opax andK.I.O with regard to those share purchases was necessary to support such a finding.I can dispose of complaint (a) very quickly. Norton Opax never did pay anincreased consideration for Mc Corquodale shares to cove sub-underwriters or anyoneelse. The success of the bid brought with is an entitlement on the part of the core subunderwritersto be paid an increased underwriting fee but this was not part of theconsideration for Mc Corquodale shares. It would have been payable to core subunderwritersif the same shares had been assented to Norton Opax by someone other thana core sub-underwriter. Furthermore, this point is not open since it was not argued beforethe panel.Complaint (b) essentially amount to an allegation that an agreement which givesunderwriters an interest in the success of a bid makes the underwriter a concert party if hepurchases shares in the target company. The short answer to this is that “concert party”could be so defined, but it is not and whether any alteration should be made is a matterfor the panel and not for the court.Complaint (c ) is no doubt based upon the sentences in paragraph 6.3 of thereport of the panel’s executive, which I have already quoted reading; “Certain of ( thecore underwriters ) met the management for he standard presentation during the offer inthe normal way but in fact K.I.O never met the management at all. “ Two assumptionsare then made, namely that the executive regarded this as conclusive of the absence of aconcert party situation and that the panel did likewise.We have in the event had the advantage of affidavit evidence from the chairman whichmakes it clear that the panel made no such error. He has deposed that the panelapproached the matter on the basis of he definition of “concert party” which requires afinding of an agreement or understanding.It did not regard the fact that there was no contact between K.I.O and Norton Opax as anabsolute bar to a finding of concerted action but rightly appreciate that, in the absence ofsuch contact, sufficient evidence to support an agreement or understanding had to befound elsewhere if such a finding were to be mad. There was no such evidence or nonesufficient to satisfy the panel and the evidence as a whole satisfied it that K.I.O’sdecisions to purchase the shares was made for genuine investment reasons whichexplained both the purchase and when it was made.Whilst this is more than sufficient to dispose of complaint (c) the chairman’s longdetailed and helpful affidavit well illustrates the need for the court to avoid168