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17 April 2009
The Takeovers Panel has published a consultation paper on the implications of the Takeovers Code in relation to upstream takeovers. Upstream takeovers occur where a takeover, in New Zealand or overseas, results in an acquirer controlling voting rights in a New Zealand Code company because the target holds or controls voting rights in that Code company.
The Panel wishes to adopt a clear and transparent policy on dealing with upstream takeovers so that it can provide clarity around the rules and certainty to the market.
The issue of upstream takeovers was highlighted recently in relation to BG Group plc's proposed upstream takeover in Australia of Origin Energy Limited, which had a majority shareholding in Contact Energy Limited, a New Zealand Code company.
The consultation paper discusses the Panel's approach in granting exemptions from the Code in respect of these transactions, including the problems that the Panel has faced. It discusses and compares how other jurisdictions deal with upstream takeovers and then sets out a range of potential options for addressing the problems.
The Panel does not have a preferred option yet. The Panel invites comment on the options using the questionnaire in the consultation paper.
The consultation paper is available on the Panel's website.
Closing date for submissions is 12 June 2009.