Takeovers Guide 2026

Overview of

Schemes & Takeovers in New Zealand 2026

OVERVIEW

Introduction Introduction

This publication provides a brief overview of the principal sources of regulation of control transactions in New Zealand, and a summary of the key differences between undertaking a control transaction by way of a takeover offer and a scheme of arrangement. It is based on the law as of June 2026.

For a more comprehensive guide, including general advice on preparing for, or responding to, takeovers or schemes in New Zealand please request a copy of Bell Gully’s Guide to Schemes & Takeovers in New Zealand here.

Schemes and takeovers in New Zealand are complex and highly regulated. The laws governing them are, in a number of respects, unique to New Zealand. Our Guide is not a substitute for detailed legal and other advice. If you require specific advice in the context of a transaction, please contact any of the Bell Gully contacts listed at the end of this overview.

Bell Gully — The law firm of choice for schemes and takeovers in New Zealand

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OVERVIEW

1.

Control transactions

The Code prohibits a person becoming the holder or controller of more than 20% of the voting rights in a code company, or increasing a holding of 20% or more of the voting rights in a code company, other than through a takeover offer, a scheme or another permitted transaction.

The two primary ways of undertaking a takeover in New Zealand are: •

•

2.

a scheme of arrangement under Part 15 of the New Zealand Companies Act 1993 (referred to in this publication as a scheme); and

The most commonly used exceptions to the 20% rule are acquisitions under schemes or full or partial takeover offers under the Code.

a full or partial takeover offer under the New Zealand Takeovers Code (referred to in this publication as a takeover offer).

The Takeovers Panel (the Panel) administers the Takeovers Code and has enforcement powers under the Takeovers Act. Under a takeover offer, a bidder makes an offmarket offer to all shareholders of the target company on the same terms (including the same consideration and conditions) in an offer document. A full offer is an offer for all of the equity securities in the target company.

A partial offer is an offer for a specified percentage of each class of voting securities.

Legislative framework

Takeover offers: Takeovers Code and Takeovers Act The New Zealand Takeovers Code (the Takeovers Code or the Code) is the principal source of regulation of takeover offers in New Zealand. It seeks to ensure that shareholders are treated equally and, after appropriate disclosure, are able to make informed decisions on whether to accept or reject a takeover offer for a code company.

Takeover offers may be “friendly” or “hostile”.

Schemes: Companies Act and Takeovers Code

The Takeovers Code applies to “code companies”. A code company is a New Zealand incorporated company that either: •

has voting securities quoted on the NZX; or

•

has:

A scheme of arrangement is a statutory court-approved procedure that allows the reorganisation of the share capital of a company. Schemes are effected under the Companies Act 1993 (the Companies Act), not the Takeovers Code.

· 50 or more shareholders; and

Schemes may be used to effect a wide range of corporate restructures, including transfers of all (or a specified proportion) of each shareholder’s securities to a bidder, cancellations of existing securities and issues of new securities to a bidder.

· at least NZ$30 million of assets and/ or annual revenue of at least NZ$15 million (based on its most recently completed accounting period).

The Takeovers Code does not apply to NZXlisted entities that are not companies (such as listed managed investment schemes or unit trusts) or which only have NZX-listed securities that do not confer voting rights, for example, debt securities.

As such, schemes can be used as an alternative to a takeover offer to effect a change of control or merger of companies.

The Companies Act provides that a transaction undertaken by way of a scheme of arrangement will not breach the Takeovers Code.

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OVERVIEW

Overseas Investment Act and Overseas Investment Regulations

A scheme has an “all or nothing” outcome, and, typically, guarantees the bidder 100% control once the scheme becomes effective.

Generally, approval under the Overseas Investment Act 2005 (OIA) must be obtained before an “overseas person” acquires an interest in a New Zealand company:

For a scheme to be effective, it needs to be approved by target shareholders by both: •

75% of the votes cast by shareholders in each interest class entitled to vote and voting.

•

A simple majority of the votes of shareholders entitled to vote (i.e., more than half of the votes attached to all shares on issue, whether they are voted or not).

•

· the value of, or consideration to be paid for, the interest exceeds NZ$100 million, or the value of the gross assets of the target and its 25% or more subsidiaries exceeds NZ$100 million (“significant business assets”); or

In addition, the court has a general discretion whether or not to approve a scheme. However the court may not order a scheme to become effective, unless: •

•

which is in excess of 25% of the shares in that company (or, where an interest of 25% or more is already held, which increases that interest to, or above, 50% or 75% (or 100% if the target is a strategically important business) depending on the interest already held) and:

the code company’s shareholders have approved the scheme in accordance with the shareholder voting requirements; and

· the target owns or has an interest in certain categories of land (“sensitive land”), regardless of whether the NZ$100 million threshold is exceeded; or

either: · the Takeovers Panel has issued a “noobjection statement” indicating that the Takeovers Panel has no objection to the court approving the scheme; or

•

· the target has satisfied the court that its shareholders will not be adversely affected by the transaction being undertaken by scheme rather than by takeover offer under the Takeovers Code.

The Takeovers Panel has a material role in schemes of arrangement even though the Takeovers Code does not apply to schemes.

This practically means that many of the principles in the Takeovers Code, while not strictly applicable to a scheme of arrangement transaction, remain relevant to this structure.

for a transaction involving “sensitive land”, if the acquisition of that interest causes the target to itself become an “overseas person” (although there is an exception to this rule where the target is a NZX listed issuer and overseas persons holding more than 10% interest in the target post acquisition do not, cumulatively, hold more than 25% interest in the target).

Where consent is required, a more detailed assessment and longer timeframe will apply if the acquirer is a foreign government investor, the target is “strategically important”, or the Minister of Finance determines that there is a national interest element to the proposed transaction.

Given the central role of the target and its board in convening the scheme meeting, schemes invariably proceed on a “friendly” rather than “hostile” basis.

Bidders that are “Australian non-Government investors” have the benefit of an increased significant business assets threshold, which is currently NZ$676 million (increased annually).

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OVERVIEW

Non-government investors from countries that have ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or various other relevant international agreements to which New Zealand is a party, including those with the United Kingdom and European Union, also have the benefit of an increased significant business assets threshold of NZ$200 million.

As at the date of this publication, a suite of proposed amendments to the Commerce Act are before Parliament. Among these proposals are:

The increased thresholds do not apply to investments in sensitive land.

Commerce Act Section 47 of the Commerce Act 1986 (the Commerce Act) prohibits a person from acquiring the assets of a business or shares in a company if the acquisition would have, or would be likely to have, the effect of substantially lessening competition in a market.

•

an authorisation if it is satisfied that there are sufficient economic public benefits (not being mere wealth transfer) to outweigh any detriment from the lessening of competition in a market.

•

a power for the Commerce Commission to suspend completion of a transaction for up to 40 working days and/or require that the parties file for clearance or authorization (with the transaction suspended until such time as the clearance has been determined).

Listing Rules If a bidder or target is listed on the NZX Main Board and/or another stock exchange, the NZX Listing Rules and/or the rules of that other exchange will be relevant to the control transaction.

A person can seek either a clearance or an authorisation from the Commerce Commission to proceed with a transaction that would otherwise breach section 47. The Commerce Commission will grant: a clearance if it is satisfied that an acquisition is unlikely to substantially lessen competition in a market; or

the introduction of the ability of the Commerce Commission to accept behavioural undertakings; and

If these reforms are passed, we would expect them to come into effect in late 2026 or early 2027.

The New Zealand Commerce Commission administers and enforces the Commerce Act.

•

•

A target that is listed on the NZX is generally required to disclose all material information to its shareholders under its continuous disclosure obligations. However, the NZX Listing Rules contain various exceptions from the requirement to disclose material information, including, most relevantly in the context of a potential control transaction, where the information concerns an incomplete proposal or negotiation and the information is and remains confidential. These exceptions allow confidential discussions between bidder and target to occur, and permit the target to confidentially disclose due diligence information to the bidder.

Where a merger raises competition concerns, it is possible for a bidder to provide an undertaking to sell certain assets or shares as a condition of clearance in order to remedy those competition concerns.

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OVERVIEW

Financial Markets Conduct Act – Insider trading

Rule 64 of the Takeovers Code does not apply to schemes. Accordingly, during the course of a scheme, misleading or deceptive conduct will be regulated by the fair dealing provisions under the FMC Act rather than under the Takeovers Code. However, in practice, the Panel will monitor instances of potential misleading or deceptive conduct during a scheme to the same standard it would if Rule 64 applied.

If a bidder is granted access to material nonpublic information of a listed target during due diligence in connection with a scheme or takeover offer, the bidder and its advisers are likely to be “information insiders” and will need to be careful not to breach New Zealand’s insider trading law under the Financial Markets Conduct Act 2013 (FMC Act).

The FMC Act imposes liability on “information insiders” who: •

trade in quoted financial products;

•

tip others to trade in or hold quoted financial products; or

•

disclose “inside information” to another person who will or is likely to trade in quoted financial products, continue to hold such quoted financial products or tip others to trade in or hold such quoted financial products.

There are certain exceptions to the prohibitions under the insider trading regime that are relevant in the context of control transactions, including acquiring financial products under a takeover offer.

The FMC Act – Substantial product holder disclosure The FMC Act requires a person with a “relevant interest” in quoted voting products that comprises 5% or more of a class of quoted voting products of the listed issuer to make a market disclosure of that interest immediately.

Any movement of 1% or more in that interest must also be notified.

Misleading and deceptive conduct – Takeovers Code and FMC Act Rule 64 of the Takeovers Code prohibits misleading and deceptive conduct in takeover offers and applies to any person, including bidder entities, target companies, shareholders and their respective directors and affiliated persons.

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OVERVIEW

1.8 Methods of acquiring or increasing control of a “Code Company” in New Zealand

1

2

Scheme of arrangement

Full takeover offer

A bidder typically acquires 100% of a target through a court approved scheme of arrangement approved by the target’s shareholders at a shareholders’ meeting. The target must commission an independent adviser’s report on the merits of the proposed transaction.

A bidder makes an off-market offer to the target’s shareholders to acquire all the equity securities of the target, with a condition that the 90% compulsory acquisition threshold is achieved (which condition may be waived by the bidder as long as a minimum 50% threshold is achieved). The target must commission an independent adviser’s report on the merits of the proposed transaction.

A bidder makes an off-market offer to target shareholders to acquire or control a certain percentage

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Partial takeover offer

of the voting securities of the target greater than 50% and less than 90%. Acceptances must be accepted by the bidder pro rata and then (where the bidder’s targeted percentage holding is not yet reached via those pro rata acceptances) additional acceptances can be taken by reference to a shareholder’s “first round” level of acceptances. The target must commission an independent adviser’s report on the merits of the proposed transaction.

A person who becomes the holder or controller of 90% or more of the voting rights in a code company (such person being a “dominant owner”) may compulsorily acquire the remaining equity securities

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Compulsory acquisition

in the target and must offer to do so. The consideration payable for compulsorily acquired equity securities depends on how the bidder became the dominant owner. Where that ownership was obtained through substantial acceptances under a takeover offer, the consideration will be that offered under the takeover offer. In other situations the residual shareholders have objection rights and the consideration must be an amount certified as fair and reasonable by an independent party.

Shareholders can approve a bidder acquiring voting securities to cross the 20% threshold or to

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Shareholderapproved allotment or acquisition

increase an existing holding above 20% either pursuant to a new issue by the target or by acquisition from other shareholders. Neither the bidder nor its associates can vote on that transaction and, where this transaction is the sale of existing shares, neither the seller nor its associates can vote. The directors of the target company must commission a report from an independent adviser on the merits of the proposed transaction, having regard to the interests of the persons who may vote to approve it.

If applicable, the NZX Listing Rules may also require an “appraisal report” in relation to the transaction (and in that case, the two reports could likely be consolidated).

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5% creep

A shareholder that already holds or controls between 50% and 90% of the voting rights in a code company is permitted to acquire up to an additional 5% in any 12-month period.

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OVERVIEW

A Comparison: Takeover offers and schemes of arrangement Takeover Offer

1

2

3

Description of transaction structure

Terms / Consideration

Acceptance thresholds / shareholder vote requirements

Scheme of Arrangement

An offer by bidder of cash and/or scrip directly to target shareholders who can accept or decline.

Bidder led and initiated process which target responds to.

Offer must be made on the same terms and provide the same consideration for all securities belonging to the same class of equity securities under offer.

Consideration options are permitted.

But different consideration payable to different holders of the same class of securities is not permitted.

Shareholder acceptances to achieve 90% will enable bidder to compulsorily acquire the balance and achieve 100%.

Minimum acceptance threshold of shares to take bidder’s holding to more than 50% (except for certain partial offers).

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Bidder and target agree to put a court-approved scheme to target shareholders for vote.

Target shares transfer to bidder by court order in exchange for cash and/or scrip.

Target board led process (court applications and scheme shareholder meeting undertaken by target).

More flexibility but interest class implications will need to be carefully considered.

Two-fold voting threshold for target: •

at least 75% of the votes cast by shareholders in each interest class of target’s shareholders are in favour of the scheme; and

•

those voting in favour of the scheme must represent more than 50% of the total voting rights in target, whether they are voted or not.

The second limb applies on an overall basis rather than by each interest class.

OVERVIEW

Takeover Offer

Scheme of Arrangement Court approval required, both to convene the scheme meeting and to enable the scheme to come into effect. Two separate court hearings are required.

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Court approvals

A “no-objection statement” is required from the Takeovers Panel. (Alternatively, the court would need to be satisfied that target shareholders would not be adversely affected by the transaction being undertaken by way of scheme and not by way of a takeover offer.)

No court approvals required.

A 75% resolution of each interest class of target is required.

5

Target class / Interest group approvals

No class or interest group approvals required.

Interest groups are determined by the court (which will reference the principles set out in Schedule 10 of the Companies Act). The Takeovers Panel provides advice to the court on what it considers the appropriate interest classes to be. If the bidder or its associates are shareholders, they must vote in a different class from other shareholders.

Shareholders who have given a voting undertaking are unlikely (without more) to form a separate class.

Shareholders who are treated differently in the transaction may potentially form a separate class.

Lock-up agreements permitted, including in excess of 20%.

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Precommitments

“Plain vanilla” lock-up agreements are unlikely to make parties “associates”.

9

Voting agreements permitted. If in excess of 20%, must be in respect of a scheme of arrangement proposed under an executed scheme implementation agreement.

Similar rules will apply in relation to “associates” as apply for lock-up agreements.

OVERVIEW

Takeover Offer

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8

Obtaining control

Deal protection

Scheme of Arrangement

>50% minimum acceptance condition required. Can have 90% condition (which can be waived).

Compulsory acquisition rights are triggered upon holding or controlling 90%.

Exclusivity, costs sharing reimbursement and break and reverse break fees are not particularly common as bid implementation agreements have been rare in New Zealand.

Takeovers Act permits the target to recover from the bidder expenses properly incurred in relation to the offer once a takeover notice has been given.

All or nothing result. The court-approved nature of the process guarantees 100% control if the scheme becomes effective.

Scheme implementation agreement can include provisions relating to exclusivity (subject to fiduciary duty exceptions), and break fees and reverse break fees.

Permitted.

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Due diligence

10

Shareholder minority buyout rights

Due diligence conditions which are dependent on bidder judgement are generally prohibited.

Same as takeover.

No minority buyout rights for target shareholders.

10

No minority buyout rights for target shareholders (unless the court orders them, which is unlikely absent unusual circumstances).

OVERVIEW

Takeover Offer

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Objection rights

Scheme of Arrangement

No objection rights to court.

Shareholders, creditors or the Takeovers Panel could seek to convince court to modify or reject the scheme.

Complaints can be made to the Takeovers Panel.

No disqualified voters in respect of the target shareholders’ resolution to approve the scheme.

However, if the bidder or its associates held shares in the target, the bidder and its associates would be a separate voting class to the other shareholders of the target.

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Disqualified voters

In that case: No target shareholder vote.

The offer can be subject to conditions but not conditions that are within the control, or depend on the judgement, of the bidder.

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Restrictions on conditions

Conditions cannot be unreasonably relied on (such as not being commercially critical to the offer or unreasonably requiring the target’s cooperation) and conditions must not restrict the target’s ordinary course of business.

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•

at least 75% of the votes cast by target’s shareholders (excluding votes of bidder and its associates) – who would vote in a separate interest class would need to vote in favour of the scheme; and

•

those voting in favour of the scheme (including votes of bidder and its associates) must represent more than 50% of the total voting rights in target.

No mandatory restriction on defeating conditions.

However, in the unlikely event agreed to by the parties, the Takeovers Panel could potentially use its “no-objection statement” process to prevent conditions that would be prohibited in a takeover context from being used in a scheme.

OVERVIEW

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Main documentation

Other documents for scrip bid

Takeover Offer

Scheme of Arrangement

Target documents • Target company statement.

• Independent adviser’s report on the merits of the offer prepared for target shareholders.

Joint document • Scheme implementation agreement.

Bidder documents • Takeover notice.

• Offer document.

• An implementation agreement could be used where there is an agreed takeover, but not common in New Zealand.

Where shares offered are quoted on a recognised stock exchange, some relief from the “prospectus” level disclosure requirements of the FMC Act may be available to the bidder, but transactionspecific relief from the FMC Act is likely to be needed to achieve this.

Target documents • Notice of meeting and scheme booklet (includes input from bidder).

• Independent adviser’s report on the merits of the scheme prepared for target shareholders (a requirement for the Panel’s “no-objection statement”).

Same as takeover.

Where the securities offered are not quoted (including, e.g., “Bidco” scrip), absent transaction-specific relief, “prospectus” level disclosure required.

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Flexibility to adjust consideration

The bidder could increase consideration through issuing a variation notice to all target shareholders, the target, the Takeovers Panel and the NZX. The variation cannot be made less than 10 working days before the end of the offer period (i.e., the varied offer must remain open for at least 10 working days).

12

Right to increase the offer price likely to be contemplated in the initial court orders, but further court appearance may be necessary.

Revised documentation (including independent adviser report) to be sent to shareholders and notice period restarted.

OVERVIEW

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Ability to block

Takeover Offer

Scheme of Arrangement

>10% stake in target will block compulsory acquisition.

Size of blocking stake needed depends on several factors, including likely voter turnout, composition of the target’s share register and the composition of interest classes.

Minimum period is approximately 30 working days from the date of the takeover notice.

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Timing

Maximum period is approximately 140 working days. This occurs where the maximum notice period of 20 working days is given, the offer is open for acceptance for the maximum 60 workings days (and is extended for the maximum permitted period of 40 working days) and compulsory acquisition rights are exercised (which takes approximately a further 4 weeks).

If lock-up commitments from major shareholders are obtained, a takeover offer can be the fastest way to gain control (i.e., over 50%).

Timing of a scheme more certain as compared to a takeover.

Potentially a faster method for acquiring 100% control (if acceptances under takeover offer are slow).

Timing likely to be dictated by any necessary regulatory approvals.

Timing likely to be dictated by any necessary regulatory approvals.

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Dealing with securities other than ordinary shares

A full offer must be for all equity securities. A partial offer must be for a specified percentage of each class of voting securities.

Can be difficult to deal with other types of securities and other sets of securityholders (for example, long term incentive plan participants).

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Schemes typically provide more flexibility to deal with securities other than shares.

Takeover: Indicative timeline 4-8 weeks preparation • Approach target • Complete due diligence • Prepare terms of offer • Arrange finance and finalise offer structure • Confidential engagement with regulators if needed

2

WEEKS

4

WEEKS

6

WEEKS

Last possible date to send target company statement (and independent adviser’s report) to bidder based on earliest possible date to send offer to shareholders

Last day to send target company statement (and independent adviser’s report) to shareholders based on last possible offer date

Takeover notice given

T+10 WORKING DAYS

Earliest possible date to send offer to shareholders1

T+20 WORKING DAYS

Latest possible date to send offer to shareholders

T+30 WORKING DAYS

Earliest possible closing date for offer based on earliest possible date to send offer to shareholders

T+80 WORKING DAYS

Latest possible closing date for offer based on latest possible offer date and excluding extensions possible where offer unconditional

20 WORKING DAYS

T

60 WORKING DAYS

OFFER PERIOD (must be at least 20 working days)

16

WEEKS

1

The Takeovers Code allows offers to be dated 3 working days prior to the date the offer is sent to shareholders. However, market practice is to date the offer on the date it is sent.

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Scheme of arrangement: Indicative timeline TARGET ACTIONS

BIDDER ACTIONS

4-8 weeks preparation

4-8 weeks preparation

• Negotiate NDA

• Approach target

• Negotiate terms of scheme and implementation agreement

• Negotiate NDA

• Appoint independent adviser

agreement

• Negotiate terms of scheme and implementation

• Commence work on notice of meeting and scheme booklet

• Complete due diligence • Confidential engagement with regulators (if needed)

• Sign implementation agreement

T

• Transaction announcement • Progress and finalise notice of meeting and scheme booklet

• Formal regulatory applications made

• Takeovers Panel reviews draft scheme documents

• Sign deed poll

• Takeovers Panel issues letter of intention

• Review drafts of the scheme booklet

• Apply for initial court orders (including filing all

and court documents

shareholder materials)

11

WEEKS

• Initial court hearing

T+55 WORKING DAYS

• Initial court orders granted

12

WEEKS

16

WEEKS

• Notice of meeting printed

T+60 WORKING DAYS

and mailed

• Shareholder meeting held

T+80 WORKING DAYS

and resolutions passed

• Takeovers Panel issues “no-objection” statement • Period for objectors to file objections

• Regulatory and other approvals obtained

• Application for final court orders

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WEEKS

20

WEEKS

• Second court hearing

T+90 WORKING DAYS

• Final court orders granted

• Scheme effective

T+100 WORKING DAYS

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Please direct your control transaction enquiries to our experts

James Cooney

Anna Buchly

AUCKLAND

AUCKLAND

CHAIR OF NEW ZEALAND TAKEOVERS PANEL DDI MOB

+64 9 916 8649 +64 21 622 555

DDI MOB

+64 9 916 8620 +64 21 190 6145

anna.buchly@bellgully.com

james.cooney@bellgully.com

Jennifer Coote

James Gibson

AUCKLAND DDI MOB

AUCKLAND

+64 9 916 8367 +64 21 706 248

DDI MOB

+64 9 916 8962 +64 21 703 735

jennifer.coote@bellgully.com

james.gibson@bellgully.com

Amon Nunns

Toby Sharpe

WELLINGTON DDI MOB

AUCKLAND

+64 4 915 6741 +64 21 687 368

DDI MOB

amon.nunns@bellgully.com

+64 9 916 8367 +64 21 330 021

toby.sharpe@bellgully.com

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