Takeovers Code boosts NZ's reputation

By Phil Boeyen, ShareChat Business News Editor

Thursday 14th March 2002

Commerce Minister Paul Swain has cited Lion Nathan's (NZSE: LNN) attempted takeover of Montana Wines and Edison Mission's bid for Contact Energy (NZSE: CEN) as examples that show the new Takeovers Code is working.

Speaking at a conference in Auckland on Thursday Mr Swain said that industry feedback on the code, which was introduced in July last year, has been generally supportive and that many people who were originally opposed are now in favour of the current regime.

"Incidents such as the Lion Nathan takeover of Montana Wines have illustrated how the code has provided a more transparent and certain process in takeover situations.

"The Takeovers Panel, through their immediate reaction and resolution of the Montana takeover situation proved very effective in enforcing the code."

Mr Swain says by requiring an offer to remain open for a specified period and to all shareholders equally, the code has removed some of the urgency seen in takeovers of old, where shareholders were coerced by brokers into selling out at a lightning pace for fear of missing out on the deal.

"Shareholders, led by fund managers, are now taking the time to consider offers and wait for competing bids to emerge.

"Edison Mission's bid for Contact Energy is a good example. Edison was forced to up its offer and extend the deadline on acceptances in the face of strong opposition to its bid. Although unsuccessful, it is a good example of the new regime's requirement to treat all shareholders fairly and equally."

The Commerce Minister says he is confident that perceptions of the New Zealand market in relation to takeovers have been greatly improved since the code was introduced.

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