July 2008

From a press release by Mr Chips Holdings Limited the market was made aware that the Takeovers Panel was not comfortable with a "lock-up" which included a provision that, if the transaction was structured requiring a shareholder vote (i.e. scheme / amalgamation), the shareholder agreed to give a commitment to vote positively for the restructured transaction.  The parties agreed to remove that provision from the lock-up.

In the unsuccessful Crescent Capital Partners takeover offer for Abano Healthcare, after a complaint to the Panel, a clarification statement was made and those who had already accepted the offer were offered an opportunity to withdraw their acceptance(s).  The Panel has also called a hearing in respect of a dispute as to the obligation of an offeror to reimburse target company costs and expenses.

Reasonable Endeavours:  A UK case had to decide what amounted to "reasonable endeavours" for satisfaction of a contract assignment condition in a business sale and purchase.  The Court found that in cases where a contract stipulates that a specific step be taken as part of the exercise of making reasonable endeavours, that step must be taken.

Duty to Debenture Holders in a Scheme:  On 21 June 2008 the Supreme Court of Canada unanimously overturned the Quebec Court of Appeal's decision that had put in jeopardy the acquisition of BCE Inc (Canada's largest leveraged buyout).  It is speculated that the original trial judge's finding that the debenture holders had no reasonable expectation of being protected in the event of a change of control is likely to have been reinstated.

The High Court judicially reviewed a Ministry of Conservation tender process.  The Court held that (i) the principles of natural justice applied to the expression of interest process; (ii) natural justice required all to receive the same information, and (iii) MOC had an obligation to act consistently.

The Court of Appeal largely upheld the High Court decision in Commerce Commission v New Zealand Bus Ltd finding an acquisition would substantially lessen competition in the Wellington subsidised bus services market.  The Court of Appeal overturned the High Court ruling that certain vendor shareholders had contravened the accessory liability provisions in the Act.  There were different approaches by different judges to the issues of accessory liability but the outcome was unanimous.

The Commerce Commission declined approval for DFS Group Limited to acquire all the shares in The Nuance Group (an airport duty free operator).

• A&R Whitcoulls acquiring the Borders trans-Tasman stores (QP advising on New Zealand legal matters).
• Wesfarmers on New Zealand matters on the largest equity raising of 2008 to date (A$2.5b) and the third largest in Australasian history.
• An overseas firm in due diligence and bidding for Vectek.
• Simplot in respect of New Zealand matters concerning a prospective takeover of Mr Chips.
• On New Zealand matters concerning the international acquisition by Hellman & Friedman of Getty Images.
• On New Zealand matters concerning the CopperCo Limited merger with Mineral Securities Limited.