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March 2010 |
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| QUIGG PARTNERS AUSTRALIAN
SEMINARS |
- Buying and Selling
a Business in New Zealand
Capital Markets: Capital Raising in New
Zealand by Australian corporates
Managing your New
Zealand Business from Australia: Employment Issues
Sydney:
9:00am to 12:00 pm, Thursday 6 May 2010
Sheraton on the Park,
Sydney, Australia.
More information and a
registration form is available at
www.quiggpartners.com.
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The Takeovers Panel is still considering submissions
received to its consultation paper on Upstream
Takeovers. The Panel has called a Section 32
meeting in respect of allegations made by Marlborough
Lines Ltd against various parties involved in their
unsuccessful partial offer for Horizon Energy
Distribution. The allegation revolves around the
Panel’s new jurisdiction prohibiting misleading or
deceptive conduct (“truth in
takeovers”). The hearing is scheduled for later this
month.
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Contract Interpretation:
The
Supreme Court overturned the Court of Appeal, restoring
the High Court decision that the agreement for gas at a
price of $6.50 per gig joule was exclusive of
transmission costs not inclusive. The Court reaffirmed
the interpretative approach that an exception to the
ordinary meaning of words arises if the meaning makes no
commercial sense. The Court was clear that at the
relevant time $6.50 reflected a market price exclusive
of transmission costs not inclusive (therefore it would
not be sensible for the agreement to be inclusive of transmission costs).
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Heads of Agreement:
A heads of agreement in respect of a 48 month cleaning
contract was held by the High Court to merely be an
agreement to agree. The Court did imply a term that the
parties would resolve their negotiations in particular
as to price (a process contract). The Court did hold a
breach of the implied term, but that it was not
causative of the failure to conclude a substantive
contract. The breach was held to give rise to a
legitimate compensation claim equivalent to three months
notice..
Fair Value: In the circumstances
of a minority shareholding acquired at “fair market
value” pursuant to Section 149 of the Companies Act, the
High Court held no minority discount of 30% was
permitted.
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Branch or Subsidiary: As
from 1 March 2009 New Zealand introduced a 90 day trial
period during which a person's employment can be
terminated without cause if specifically provided for in
the written employment agreement. This is
restricted to businesses with less than 20 employees and
is subject to good faith obligations. This will be
a new factor for offshore clients to consider in
weighing the positives/negatives of operating in New
Zealand as a branch or subsidiary.
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The Australian Tax Office
announced it intends to target arrangements used to
increase the recovery of GST incurred in M&A
transactions.
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ASIC released draft guidelines for handling confidential
information and market soundings in the context of M&As and
capital raising.
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The Corporations & Markets Advisory Committee (CAMAC)
released a report on schemes of arrangement. The report
recognised the significant role schemes play in the
Australian M&A transaction markets. The report recommended
a number of technical, but not controversial changes.
- The
amendments to the Foreign Acquisitions & Takeovers Act was
given Royal Assent. The changes broaden the scope of
coverage to catch a greater variety of foreign investments
in Australia regardless of their structuring.
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Recently the Cabinet of the
present Government approved amendment to the Financial
Advisers Act and Financial Services Providers Act. The
amendments will cover fees, disclosure and a compulsory
register of advisors.
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The New Zealand Government is
presently looking to create a "super" regulator for the New
Zealand Capital Markets. It would combine the
functions of the Securities Commission, Registrar of
Companies Enforcement Section and NZX Regulatory Unit.
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| COMPETITION
/ ANTI-TRUST IN NZ M&A |
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In
what is a sign of the times for M&A in New Zealand,
there has not been a clearance application made to the
Commerce Commission for more than six months. This is
unprecedented in recent times. Good news is that all
the signs are positive for increased activity in the
coming months. The Chairman of the Commission has
indicated that there are expectations of a surge in M&A
activity in the near future. In the meantime, the
Commission has released draft guidelines relating to
offers to divest assets or shares as a means of
addressing competition concerns in the course of an
application for clearance. The draft guidelines detail
the risk analysis the Commission will apply in order to
assess the effectiveness of the divestment offering. We
would be pleased to send you a copy of the guidelines if
you wish. Email:
johnhorner@quiggpartners.com.
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| RECENT
TRANSACTIONS FOR QUIGG PARTNERS |
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Quigg
Partners has recently had the pleasure of advising:
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on Trademe’s acquisition of
BookIt;
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Daily Mail Group (DMG) in
respect of the sale of its New Zealand business
interests (including Top Gear joint venture, Big
Boys Toys shows);
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on the preparation of a New
Zealand prospectus and investment statement for
local equity offer;
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due diligence and acquisition
agreement for USA trade acquirer of NZ business;
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a USA acquirer of a New Zealand
recruitment business;
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on New Zealand matters
concerning Australian capital raisings (including
A$806m equity raising by Lend Lease);
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on New Zealand matters
concerning the acquisition and establishment by
Ciena Crop of the Ethernet assets of Nortel’s metro
Ethernet networks business (total acquisition price
US$769m);
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on New Zealand matters
concerning an overseas telecommunication company
business acquisition;
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in respect of a joint venture
involving educational institutions;
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on recent
settlement of Bemis’ acquisition of Alcan Packaging
business (including Danaflex business in New
Zealand)
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AIG on New
Zealand legals re sale of Asia Life unit sale to
Prudential (US$35.5b).
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