The Takeovers Panel has recommended to the Minister of Commerce and Consumer Affairs that amendments be made to the Takeovers Code and other capital markets legislation.

The Panel’s recommendations include changes to the definition of ‘Code company’ to remove the 12-month ‘look back’ when a listed Code company is taken private and to apply this ‘look back’ to unlisted Code companies in some circumstances. The Panel has also recommended amendments to the Code to require additional disclosures about an offeror’s committed funding of the purchase consideration and to expressly provide that non-payment of purchase consideration is a breach of the Code.

Other recommendations include updating how unclaimed offer consideration is dealt with and ensuring that purchasers in schemes of arrangement can acquire unencumbered title to shares on completion of a scheme.

These recommendations are based on the Panel’s experience with the administration of the Code and schemes of arrangement under the Companies Act 1993 and follow from consultation with market participants in late 2021. The Panel believes the proposed changes are important and would positively assist the working of New Zealand’s takeovers market by increasing certainty for acquirers and for investors in Code companies.

The Panel’s recommendations are on the Panel’s website and can be viewed here.

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