NEW ZEALAND Law and Practice Contributed by: Ben Paterson, Cath Shirley-Brown and David Hoare, Russell McVeagh
7.2 Material Shareholding Thresholds and Disclosure in Tender Offers The primary material shareholding disclosure thresh - old and filing obligation under the NZX Listing Rules and FMCA is the “substantial product-holder” noti - fication: persons who obtain voting power of 5% or more in an NZX-listed company must disclose this fact (as well as other details about their interests and their name and address) by filing a “substantial prod - uct-holder” notice. In circumstances where a person’s voting power exceeds 5%, a substantial holding notice must also be filed each time the voting power increases or decreases by 1%. 7.3 Mandatory Offer Thresholds New Zealand law prohibits the acquisition of a con - trolling interest (as defined in 3.1 Primary Regulators and Regulatory Issues ) in the issued voting shares in a Code company that would result in a person’s vot - ing power equalling or exceeding 20%. Acquisitions above this level must be effected through one of the prescribed exceptions. 7.4 Consideration In a Code transaction (whether transacted as a takeo - ver offer or a scheme), a bidder may offer any form of consideration, including a cash sum, securities or a combination of cash and securities (which may include rollover equity in a Bidco). New Zealand does A control transaction implemented by way of a takeo - ver offer will be conditional upon a minimum interest threshold; the bidder must offer to acquire a certain percentage of the shares in the target (eg, 90%, so that the target can acquire the target compulsorily, or 51% so it has voting control). It is common for both takeover offers and schemes to include other conditions, such as regulatory condi - tions (NZCC and/or OIO) and a MAC condition. How - ever, in a takeover offer scenario, the Panel will limit a buyer’s ability to enforce conditions that are within the buyer’s sole control or based on subjective opinion. not have any minimum price rules. 7.5 Conditions in Takeovers
In a scheme context, the target is unlikely to agree to any such conditions. See 6.6 Break Fees , which includes the circumstanc - es where break fees can be negotiated between the bidder and the target in both non-Code transactions and Code transactions. 7.6 Acquiring Less Than 100% A bidder is able to acquire a target compulsorily if it has obtained a controlling interest in 90% or more of the voting securities in the target. In the event that greater than 50%, but less than 100%, of the target is acquired, a private equity buyer will largely have control over the target through its abil - ity to control the board. However, for as long as the target remains listed, it will continue to be subject to the NZX Listing Rules – which will, amongst other things, require shareholder approval for certain transactions (including related- party transactions). A debt pushdown would constitute financial assis - tance, which is regulated by the Companies Act 1993 and/or the NZX Listing Rules (depending on whether Pre-bid undertakings from existing shareholders, whether taking the form of irrevocable undertakings (in relation to a takeover offer), voting undertakings (in relation to a scheme) or public statements of intent, are a common feature of New Zealand takeovers. These are normally obtained prior to the announce - ment of the control transaction. Any such undertaking may, however, allow the share - holder to take advantage of any superior offer that may emerge (either absolutely or within a certain increased value range). the company is private or listed). 7.7 Irrevocable Commitments
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