Foreign predators continue to eye New Zealand

Bell Gully was involved in Rank Group's takeover of Carter Holt Harvey. Picture / Chris Callinan

Even bigger overseas predators are likely to join the cashed-up Australian private equity outfits and corporates who are making New Zealand businesses owners offers they can't refuse, a leading merger and acquisition specialist says.

Thomson Financial yesterday reported New Zealand merger and acquisition activity continued apace in the first half of the year. Deals with a combined value of $5.4 billion were completed over the period, more than half as much again as the first half of 2005.

Brynn Gilbertson of Bell Gully, which Thomson said was the leading legal adviser on merger and acquisitions over the period, believed the strong activity would continue for the remainder of the year.

"Given there still appears to be opportunities emerging, we expect the buoyancy to remain," he said.

Gilbertson said the opportunities would arise as potential vendors eyed the prices being commanded by sellers in recent deals.

Competition between cash-rich private equity funds and other buyers for quality assets was strong, "and it's delivering good results for vendors", he said.

Transtasman investors and corporates were the major players in New Zealand merger and acquisition activity at present, "but we are also seeing a gradual increase in interest in Australasia from Europe and the United States".

The fierce competition for Australian assets meant attention was increasingly turned to New Zealand.

"Obviously New Zealand's a much smaller market and there will be fewer of those opportunities that will attract those buyers, but to the extent that some come up, I think they will be looking down here as well.

"How much of an influence these markets will have on future New Zealand merger and acquisition activity will be something to watch with interest."

Bell Gully said it had advised on 30 transactions worth a total $1.88 billion over the first half.


BIG DEALS

First half M&A data:

* 125 merger and acquisition transactions completed.

* Combined value $5.4 billion.

* A 52 per cent increase on the same period last year.