S.I. No. 217/1984 - Proposed Merger Or Take-Over Conditional Order, 1984.

S.I. No. 217 of 1984.

PROPOSED MERGER OR TAKE-OVER CONDITIONAL ORDER, 1984.

I, JOHN BRUTON, Minister for Industry, Trade,Commerce and Tourism, having considered the report of the Examiner of Restrictive Practices under section 8 (1) of the Mergers, Take-overs and Monopolies (Control) Act, 1978 (No. 17 of 1978) of his investigations of the proposed merger or take-over involving the following enterprises, that is to say, the Governor and Company of the Bank of Ireland and the Irish Civil Service Building Society, being the proposed merger or take-over of which I was notified under section 5 of that Act on the 6th day of April, 1984, having complied with section 9 (3) of that Act and thinking that the exigencies of the common good so warrant, hereby, in exercise of the power conferred on me by section 9 of that Act and the Trade, Commerce and Tourism (Alteration of Name of Department and Title of Minister) Order, 1983 ( S.I. No. 384 of 1983 ), make the following Order:

1. This Order may be cited as the Proposed Merger or Take-over Conditional Order, 1984.

2. In this Order—

"the Bank" means the Governor and Company of the Bank of Ireland;

"investment shares", in relation to the Society, and

"savings shares", in relation to the Society, have the meanings that they have in the Rules of the Society;

"the Society" means the Irish Civil Service Building Society.

3. The proposed merger or take-over involving the following enterprises, that is to say, the Bank and the Society of which the Minister was notified under section 5 of the Mergers, Take-overs and Monopolies (Control) Act, 1978 (No. 17 of 1978), on the 6th day of April, 1984, is hereby prohibited unless the conditions specified in Article 5 of this Order are complied with.

4. (1) The reasons for making this Order are that the Minister considers that—

(a) but for this Order, the Bank would, by reason of the proposed merger or take-over specified in Article 3 of this Order become the dominant shareholder in the Society.

(b) such dominance could be detrimental to the interests of the holders of savings shares in the Society, and

(c) this Order ensures that, if the proposed merger or take-over aforesaid is effected, the interests of the holders of savings shares in the Society will be protected.

5. The conditions referred to in Article 3 of this Order are:

(a) the Rules of the Society shall as soon as may be be altered so as to give effect to the proposals for their alteration made by the Bank and specified by the Bank to the Minister for the Environment on the 15th day of August, 1984 (which proposed alterations, as so specified, are set out in the Schedule to this Order),

(b) that the Bank shall, as soon as may be after condition (a) of this Article has been complied with, inform the Minister of such compliance, and

(c) that the proposed merger or take-over specified in the said Article 3 shall be effected within 12 months of the making of this Order.

SCHEDULE

Article 5

Proposals for the alteration of the Rules of the Society specified by the Bank to the Minister for the Environment.

1. Voting Rights

(a) Saving Shares will have voting rights attached, and, save as set out in this statement, the holders of such shares will be given an entitlement to receive notice of, and to attend and vote at meetings of the Society and to exercise all other rights of a member of the Society which derive from such entitlement.

(b) Subject to (d) and (e) below, on a Special Resolution each Investment Shareholder and each Savings Shareholder will have one vote.

(c) In the case of a resolution which is not a Special Resolution:—

(i) Investment Shares will carry one vote per share;

(ii) Savings Shares will carry one vote for every £3 of nominal value.

(d) The voting rights carried by Savings Shares will not be exercisable in relation to a Special Resolution the effect of which is to alter or conflict with the Rules and which the Arbitrator determines under paragraph (e) to be unreasonable having regard to the interests of Investment Shareholders.

(e) Where a resolution is to be proposed as a Special Resolution and Investment Shareholders holding £5,000 in aggregate of Investment Shares are of the opinion that the resolution, if passed, would be unreasonable having regard to the interests of Investment Shareholders, they shall be entitled to refer the matter to the Arbitrator and have it determined as a dispute under section 48 of the 1976 Act, and the voting rights attached to Savings Shares shall not be exercised on such Special Resolution (and, if exercised, shall not be counted) unless it shall be so determined that the resolution is not unreasonable as aforesaid. Where it has been so determined any amendment of the terms of the Special Resolution moved at the Meeting shall be consistent with section 56 (3) of the Act.

(f) The rights conferred by the Savings Shares will be subject to the same qualifications, as to the length of time for which the shares have been held, the minimum nominal value of the shares and the age of the shareholder, as those applicable to the Investment Shares.

(g) Not less than 20 shareholders or any number of shareholders having £50,000 in aggregate can convene a Special General Meeting.

(h) The Arbitrator will be appointed by the President of the Incorporated Law Society of Ireland.

2. Capitalisation Issue

(a) Bonus Investment Shares may be issued to Investment Shareholders on a capitalisation of reserves; as in the existing rules there will be no provision for the issue of bonus shares to Savings Shareholders.

(b) Upon the Rules being altered, seven new Investment Shares will be issued by way of bonus for each Investment Share already held, representing a capitalisation of approximately £2 million from reserves.

3. Directors

(a) Number of Directors

Maximum 9; minimum 6; not more than one-third of which shall be reserved for the Directors elected by the Investment shareholders. Prior to the adoption of the new Rules, ICSBS will co-opt two Directors as the first "Investment" Directors. The new Managing Director will also be co-opted. Future Investment Directors (not more than three) to be elected by Investment Shareholders. The remaining Directors will be elected by all shareholders.

(b) Retirements

One Investment Director and two other Directors will retire annually but will be eligible for re-election.

(c) Votes required to remove a Director

In the case of an Investment Director, not less than 25% of Investment Shareholders holding 75% of the Investment Shares. In the case of any other Director, three-quarters of members at a Special General Meeting or four-fifths of Directors.

(d) Nominations

Retiring Directors or those nominated by Directors (in the case of an Investment Director, by Investment Directors) — no shareholding qualifications for proposers. Otherwise, proposals require 25 shareholders, each holding £500 of share capital (Investment or Savings). No person being a Director, official or employee of any other Building Society or who the Board have reason to believe is a nominee or representative of any other Building Society will be eligible to become a Director of the ICSBS.

(e) Share Qualifications of Directors

£1,000 holding in Investment or Savings Shares.

GIVEN under my Official Seal this 16th day of August, 1984.

JOHN BRUTON,

Minister for Industry, Trade, Commerce and Tourism.

EXPLANATORY NOTE.

The effect of this Order is to prohibit the proposed merger or take-over involving the Bank of Ireland and the Irish Civil Service Building Society except on certain conditions, the most important of which is that the rules of the Irish Civil Service Building Society be altered in accordance with the matters specified in the Schedule to the Order.

The Order is effective from the date of its signature but may be annulled by a resolution of either House of the Oireachtas within 21 sitting days in either case.