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November 2009 |
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Oil and
gas exploration production assets -
"Iconic"
dairy business -
Small
import/sales business -
Small
service provider (especially to local bodies) -
Minority
stake in a leading technology company, iron sands
company and agricultural equipment company
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Upstream Takeover -
Panel's Preferred Option:
The Takeovers Panel, after receiving initial
submissions, has released a further consultation paper
on Upstream Takeovers with a Preferred Option. The
preferred option involves the Panel issuing a guideline
as to when either an unconditional exemption or a
conditional exemption would likely be available (and if
conditional on what terms). The introduction of a
"sell down" mechanism (as an alternative to a follow on
offer requirement) is innovative.
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A Nominee Triggers the Contracts (Privity) Act:
The Supreme Court refused
leave to appeal a Court of Appeal decision that
description of a purchaser in an agreement for sale and
purchase as "X and/or nominee" was sufficient to
bring the nominee within coverage of the Contracts
(Privity) Act 1982 with the consequence that the nominee
can enforce the contract.
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Warranty to Disclose all Material
Contracts: In a business asset sale the High
Court held that a warranty requiring a Vendor to
disclose "all material contracts which relate to the
Business" was limited to those contracts the vendor
"knew, or ought to know, about".
Stock Valuation Dispute - No Stay
of Proceedings: A defendant requested a stay
of summary judgment proceedings whereby the plaintiff
was seeking to enforce an independent expert's stock
valuation. The business agreement allowed for a
dispute resolution procedure and the defendant wished to
use this arguing irregularities in the appointment of
the independent expert. The High Court rejected
the application for a stay holding "the claim has the
appearance of one made with the benefit of hindsight".
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Ongoing Obligation to use "Reasonable Endeavours":
An Australian NSW Supreme Court case, when interpreting
an asset sale agreement, held an obligation to use
"reasonable endeavours" to novate the party's
obligations under various agreements were an ongoing
obligation.
Schemes of Arrangement - Ability to Release
Claims Against Third Parties?: A recent
Federal Court case permitted a scheme to release claims
against third parties (the third parties were
contributing toward the scheme fund to be distributed
between creditors).
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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.
Employees Enforcing Terms in Business
Acquisition Agreements: The Full Court of the
Employment Court held a purchaser, under a business sale
and purchase agreement, breached its obligations under
the Employment Relations Act by failing to effectively
implement the arrangements in the sale and purchase
agreement in respect of employees of the "old business"
and prevented such employees accepting the new offer of
employment committed to.
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The Anti-Money Laundering and Countering
Financing of Terrorism Act has been passed.
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The Ministry of Economic
Development has released a proposal which includes the
"nasty surprise" that large private companies/partnerships
to file annual financial statements. The proposals
include the removal of filing requirements for overseas
companies that are not issuers and/or whose New Zealand
businesses are not large. The Ministry is also
suggesting reducing the period to file financial statements
from the present (i) five months and 20 working days within
year end to (ii) four months within year end. Would
you like to make a submission: If yes, contact David
Quigg at
davidquigg@quiggpartners.com.
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| COMPETITION
/ ANTI-TRUST IN NZ M&A |
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The Commerce
Commission recently cleared:
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Frucor Beverages to
acquire Simply Squeezed, the well known juice
business;
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Pfizer Inc to acquire
New Zealand's Wyeth Corp business (as part of the
global acquisition); and
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Schering-Plough to
merge with Merck & Co Inc. (as part of the global
merger).
The Commerce Commission
has sought leave to appeal a Court of Appeal decision
(declining an alleged breach by Telecom of Section 36
which prohibits a party from using market power to deter
competition). In another case against Telecom
under Section 36 the Commission has been successful
where the High Court found charges to competitors for
access to data transmission markets amounted to taking
advantage of a substantial degree of market power and
inferred an anti-competitive purpose.
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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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Volkswagen AG on Overseas Investment Office
approvals;
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on the
preparation of a New Zealand prospectus and
investment statement for local equity offer;
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Hunter Hall
taking a strategic placement in Wellington Drive
Technologies;
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on a sale of
a New Zealand engineering business;
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on New
Zealand matters concerning Australian capital
raisings (including Macquarie Media, Boart Longyear,
Macquarie Airports, Photon Group);
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on New
Zealand matters concerning the Atlas Iron & Warwick
Resources merger;
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on New
Zealand matters concerning the business combination
between Sino Gold Mining and Eldorado Gold Corp;
- on New
Zealand matters concerning capitalisation of Capral
Limited;
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management buyout of local IT research firm
Harmonic;
bidder for Line 7 apparel business;-
New Zealand advice on
Wesfarmers Euro Medium Term Note Programme; and
- sale of a joint
venture interest to co-venturer.
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