NEW ZEALAND Law and Practice Contributed by: David Weavers, Jesse Fairley and Matt Consedine, Russell McVeagh
Schemes Under Part 15 of the Companies Act A Scheme is a court supervised mechanism that allows the restructuring of a group of companies (including by way of amalgamation) to be under- taken so that it is not subject to the Takeovers Code. It is a common way for a bidder to seek to take over a company that has a widely held share register. To be exempted from the Takeo- vers Code, a Scheme requires: • consent from the boards of the companies involved, as the Scheme is technically pro- posed by the target and accordingly would only be available for a recommended takeo- ver and not in a hostile situation; • shareholder approval from 75% of shares held in each interest class and 50% of all shares; and • approval of the court: the court must be satis- fied that the shareholders of the target will not be adversely affected by using a Scheme (as opposed to the Takeovers Code) to effect the change of control unless the Takeovers Panel issues a no-objection statement with regards to the Scheme.
Certain Funds Requirements Where an offer is conditional on finance from a third party, the ability to terminate the arrange- ment must not be “in the power or under the control of” the offeror (see Rule 25(1) of the Take- overs Code). The list of conditions to the financ- ing will typically be limited to conditions that are bona fide required by the third-party financier to protect its interests and which cannot be used as a device to avoid the takeover offer. Within the offer, an offeror must also confirm that sufficient resources will be available to them to meet the consideration in connection with full acceptance of the offer and to pay any debts incurred in connection with the offer (see Clause 9 of Schedule 1 of the Takeovers Code). To sat- isfy this requirement, the grounds upon which the financing could be withdrawn will need to be very limited. 10. Jurisdiction-Specific Features 10.1 Other Acquisition Finance Issues There is no applicable information in this juris- diction.
322 CHAMBERS.COM
Powered by FlippingBook