NEW ZEALAND Law and Practice Contributed by: Ian Beaumont, Tom Gillespie and Sam Kember, Russell McVeagh
7.2 Type of Disclosure Required Where shares are to be issued to “retail” investors as part of a business combination, the FMCA will (in the absence of any available exemption) require the issuer to prepare a Product Disclosure Statement and Reg - ister Entry (as would be the case for an initial public offering of securities). Where the issuer is listed on the NZX, it may be able to offer shares without a Product Disclosure Statement and Register Entry in reliance on a “cleansing notice” under the quoted financial product exclusion. Where shares are offered as consideration under a takeover offer, the bidder’s offer document must contain prescribed information under the Takeovers Code, including details of the securities being offered, the terms and conditions of the offer and information about the bidder’s intentions for the target. 7.3 Producing Financial Statements There is no express statutory requirement under the Takeovers Code for a bidder to include audited or pro forma financial statements in its offer document, although the document must contain sufficient infor - mation to enable shareholders to appraise the offer. In practice, where the consideration includes scrip, bid - ders will commonly include historical financial infor - mation and, where relevant, pro forma financial infor - mation for the combined group. Financial statements prepared for New Zealand regulatory purposes must comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS). 7.4 Transaction Documents For public M&A transactions conducted by way of takeover offer, the Takeovers Code prescribes the content of the offer document and the target com - pany statement, both of which are sent to sharehold - ers and filed with the Takeovers Panel. Any underlying implementation agreement between the bidder and the target is not required to be disclosed in full under the Code, although its material terms will typically be summarised in the offer document or target company statement and disclosed to NZX under the continuous disclosure obligations in the NZX Listing Rules. For schemes of arrangement, the scheme implementa - tion agreement is commonly appended to the scheme
• a formal pre-bid agreement or lock-up deed, under which the shareholder irrevocably agrees to accept the takeover offer or vote in favour of the scheme (as applicable), subject to agreed conditions; or • a public intention statement, in which the share - holder publicly announces its intention to accept the offer or vote in favour of the scheme. Both forms of commitment are effective in New Zea - land. The Takeovers Panel monitors compliance with public statements made by shareholders in the con - text of a takeover offer, and a shareholder that makes a public statement of intention may face regulatory scrutiny if it subsequently acts inconsistently with that statement. These commitments are often qualified by a “superior proposal” carve-out, which permits the shareholder to revoke its commitment and accept or vote in favour of a competing proposal that is superior to the offeror’s proposal. An NZX-listed target is subject to continuous disclo - sure obligations under the NZX Listing Rules and must immediately disclose any information that a reason - able person would expect to have a material effect on the price of its listed securities. In practice, a target is typically not required to disclose the receipt of a pre - liminary or non-binding indicative proposal, provided that it remains confidential. However, once a takeover notice is given under rule 41 of the Takeovers Code, the target must immediately notify NZX. For a full or partial takeover offer under the Takeovers Code, the bidder must give notice to the target and the Takeovers Panel before dispatching the offer. The target must then send shareholders a target company statement containing the board’s recommendation and an independent adviser’s report on the merits of the offer. Where a transaction is structured as a scheme of arrangement under Part 15 of the Com - panies Act, the proposal is made public when the parties enter into a binding scheme implementation agreement. 7. Disclosure 7.1 Making a Bid Public
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