1. INTRODUCTION

1. The Takeovers Panel has been asked by the Minister of Commerce to advise on the issue of amalgamations and schemes of arrangement under the Companies Act 1993 ("the reconstruction provisions") involving companies that fall under the Takeovers Code. This follows the Panel's June 2006 discussion paper on the matter, and the Panel's subsequent recommendations to the Minister of Commerce, and to the Select Committee of Parliament considering the 2006 Business Law Reform Bill.
2. Both the Code and the reconstruction provisions regulate changes of control of New Zealand incorporated companies. The Companies Act is universal in its scope. It applies to all companies regardless of size or ownership structure. The reconstruction provisions have widespread application and purpose. The Code applies to companies listed on a registered exchange and companies with 50 or more shareholders.
3. The Code and the reconstruction provisions place different rights and obligations on the parties involved in takeovers. There have been instances where takeover bids have been structured to circumvent the requirements of the Takeovers Code. The question is whether having the ability to do so is desirable.
4. The purpose of this consultation document is to seek your views on the Panel's assessment of the issue and the merits of the proposals outlined in this paper, and any other comments you wish to make. Your feedback will be used to assist the Panel to advise the Minister of Commerce on options to deal with the cross-over between the reconstruction provisions and the provisions of the Code.
5. This paper has been prepared to provide the basis for a Regulatory Impact Statement (RIS) should the Panel conclude this process by recommending that changes be made to existing laws. However, the Panel is coming to this issue with an open mind.
6. In preparing this discussion paper the Panel has been assisted by NZIER which has provided comment on a draft. NZIER will also assist the Panel with the analysis of submissions and the preparation of a RIS, should one be needed.
7. The Panel would like to receive all submissions by 15 February 2008.
8. Any submissions received are subject to the Official Information Act 1982. The Panel may make submissions available upon request under that Act. If any submitter wishes any information in a submission to be withheld, the submission should contain an appropriate request (together with a clear identification of the relevant information and the reasons for the request). Any such request will be considered in accordance with the Official Information Act 1982.