New Zealand
With 50 partners and over 170 legal staff across three offices in Auckland, Wellington and Christchurch, we have the resources and experience to advise on all areas of New Zealand law. We help clients achieve a competitive edge in today’s market with clear, commercially focused advice across all of their legal requirements, including commercial, corporate, property, construction, finance, tax, dispute resolution, environmental and government relations issues. We play key roles in mergers and acquisitions, disposals, takeovers, financing, insolvency, restructuring, banking, procurement processes, large scale infrastructure projects and dispute resolution proceedings. Our lawyers have worked in Australia, the US, Asia, Africa, the UK and Europe and are well placed to advise on inbound and outbound trade and investment matters. We advise major New Zealand and multinational players in all industries and sectors of the economy.

NZ market trends for 2016

While New Zealand will not be immune should the current jumpiness in global markets develop into something more sinister, 2016 has got off to a solid start and current indications are that this will continue.

This is particularly so for the M&A market where strong buy-side activity from Australian private equity investors last year is expected to flow through to this year. The bank sector is also growing due to the arrival of major Chinese players - like Bank of China, Industrial and Commercial Bank of China and China Construction Bank – after a successful entry to Australia.

Other M&A growth drivers include:
  • continuing strong demand from China, primarily in primary products and tourism
  • stronger off-shore interest generally, reflecting the weaker Kiwi dollar
  • plentiful access to capital from banks keen to fund acquisitions, but pricing will be on an upward trajectory, and
  • more flexibility around takeover mechanisms as schemes of arrangement become more common.
Areas expected to attract transaction traffic are the aged care, telecommunications, primary products and energy sectors.

In the public sphere, opportunities exist in the government’s policies to promote affordable housing and to divest a significant proportion of Housing Corporation New Zealand’s housing portfolio. Sales must be for social housing purposes and must include a certified Community Housing Provider (CHP) but it is expected that cash-poor CHPs will look to developers and financiers to put together a credible offer.

RFPs for the first two transactions, involving more than 1,200 homes in Tauranga and 300 in Invercargill, are expected to be issued later this month. Legislation passed last month will facilitate the process by empowering Ministers to sidestep the Housing New Zealand Board in order to sell or lease properties. 

To assist with funding the post-earthquake rebuild, Christchurch City Council has initiated the sale of City Care, a council-owned construction and maintenance company. There is also persistent speculation that stakes in Christchurch International Airport, Lyttelton Port and Orion (an electricity lines business) will be offered to the market if needed to address the Council’s fiscal needs. But asset sales are politically controversial and this is a local body election year so we are not expecting any decisions in the near term.

The NZX50 is coming off a strong performance last year – up 13.6 percent – and this year’s reporting season is broadly in line with market expectations, with more deviations on the upside than the downside. Chapman Tripp is also aware of a number of companies that are considering IPOs and we anticipate that more will emerge as the year progresses, assuming no sharp deterioration in the global economic outlook.

Based on this, we are picking an upturn in IPO volumes from last year, but not a return to the stellar levels of 2013 and 2014.

Other trends we have identified in the IPO area are:
  • a more circumspect retail investor audience for private equity IPOs, reflecting the fallout from Dick Smith Electronics
  • strong growth in secondary capital raisings after a buoyant year in 2015
  • block trades becoming the new black as a number of major shareholders come off escrow
  • higher take-up of the ASX Foreign Exempt status extended last year by ASX to NZ Main Board issuers, and
  • increased use of exchange traded funds.
Another trend to watch for is the evolving impact of the Financial Markets Conduct Act as the transitional arrangements expire and as market participants become more confident in exploring the innovative scope that the Act creates. The broad FMCA obligations on fair dealing and the more flexible advertising regime it provides encourage the fair, efficient and transparent promotion of financial products ahead of an IPO, and there has been some use of this facility.

So far, however, there has been less appetite for change in the presentation of the formal offer documents for equity IPOs, several of which have been significantly longer by word count than some of the 2014 investment statements prepared under the baggier parameters of the now repealed Securities Act.

The major concern on the M&A front is the slowness of the overseas investment consent process. Since the counterfactual test was introduced in 2012, timeframes for consent decisions involving sensitive land have lengthened considerably and are now much slower than for comparable applications in Australia. Although some steps may be taken to speed up the process, only incremental improvements can be expected.


Tim Tubman and Rachel Dunne are partners at Chapman Tripp, specialising in corporate law.