Aborted takeovers of NZX listed companies can result in a bill from the target company, with Empire Technology disputing a $247,000 bill claimed by Vital after Empire backed out of a 2024 takeover claiming Vital’s market information pre-takeover was misleading.
Empire alleges Vital kept the securities market in the dark through 2024 about its declining profitability and the prospect of losing a major customer, in breach of market rules requiring ‘continuous disclosure’ of all material information.
Vital Ltd provides radiocommunication services nationwide.
Empire Technology Ltd, controlled by Simon Herbert, made an unsolicited bid for Vital in August 2024 at $0.375 per share.
It later withdrew, alleging Vital management misled the market.
It claims Vital’s forecast net profit after tax of $400,00-$700,000 disclosed to the market in February 2024 was grossly misleading given an actual profit figure of $253,000 was announced shortly after Empire Tech’s August takeover offer.
It also claims Vital failed to publicly disclose the potential revenue loss should major customer Hato Hone St John shift its callout services to a new Public Safety Network.
Empire Tech learnt later that the Hone Hato St John contract was worth $3.7 million to Vital in 2024.
After Empire Tech withdrew, Vital got a ruling from the Takeovers Panel holding Empire liable to pay $247,036 as compensation for its costs in responding to Empire Tech’s takeover offer.
Empire Tech is challenging the validity of this Takeover Panel ruling in the High Court.
Separately, Vital sued to put Empire Tech into liquidation for non-payment of the $247,000 claimed compensation.
Empire Tech countered, claiming it was entitled to damages from Vital alleging breaches of NZX listing rules, Financial Markets Conduct Act and Fair Trading Act.
Justice Gendall put Vital’s winding up application on hold.
A full court hearing is needed to consider whether Empire Tech is entitled to damages for alleged breaches of the ‘continuous disclosure’ rules by Vital.
The Financial Markets Conduct Act requires listed companies to pro-actively release all information that a reasonable person would consider having a material effect on market prices.
Empire Technology Ltd v. Vital Ltd – High Court (12.08.25)
25.176