KEY POINTS:
The Takeovers Panel is taking another tilt at amalgamations and "schemes of arrangement" which are seen as a means of eluding the Takeovers Code.
The panel said in a release today that it was preparing a consultation paper on proposed changes of control of Code Companies, for publication later this year.
It also used the opportunity to highlight a recent amalgamation proposal, that of Christchurch exporter Humanware and Australian private equity firm Jolimont Capital.
Humanware makes computerised products for the visually impaired. It is seeking shareholder approval for the deal which would leave 30 per cent of the company in management hands and give 70 per cent to Jolimont.
While it made no comment on the merits of the Humanware deal, the panel noted it was the type of transaction "that caused concern to the market last year and resulted in the panel being asked to make new recommendations ... about possible changes to the law".
Other deals to raise concern about amalgamations include the effective takeover of Waste Management by Australian company Transpacific Industries last year.
An amalgamation requires just 75 per cent shareholder approval to trigger compulsory acquisition of the remaining shares, instead of 90 per cent under takeover rules.
The Takeovers Panel wanted to close the loophole last year via the Business Law Reform Bill, but the move failed to gain enough political support.
However, after the introduction of tighter regulations, the Commerce Minister Lianne Dalziel asked the panel to revisit the issue.
Schemes of arrangement also came under fire when speculation arose that Warehouse founder and major shareholder Stephen Tindall wanted to buy back his company with a private equity partner.
Any hopes of such a deal were dashed, however, when two potential suitors, Woolworths and Foodstuffs, took 10 per cent stakes in the company.
- NZPA
