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14/3/2018 — General
Bell Gully sees more NZX takeovers ahead

The legal firm Bell Gully believes the strong trend of takeovers on the New Zealand Stock Exchange market will persist for the rest of 2018.

The website Sharechat said that last year there were eight formal takeovers on the NZX.

Sharechat, using the BusinessDesk reporting service, said that of the eight takeovers mounted, only three were successful, and one is still to be decided. That low success rate was due in part to two of the offers shaking out rival offers, something New Zealand's stock market doesn't typically see, the law firm said in a takeovers report.

Just 5% of takeovers on the NZX are typically contested and the outcomes of last year's rival bids could spur greater competition in the future.

Bell Gully's report said takeover activity on the local market increased for the fourth year and was the busiest it's been for a decade with about twice the average annual rate since the Takeovers Code came into effect in 2011.

Partner James Cooney said the conditions for mergers and acquisitions are “still strong” and that should spur greater interest from buyers.

“There are a number of buyers in strong positions out there and may suggest we might see a continuation of contested offers,” Cooney told BusinessDesk.

“We would expect to see reasonably solid levels of takeover activity.”

BusinessDesk had said the Bell Gully report echoes rival Chapman Tripp's M&A insights paper, which showed the number of local transactions climbed 31% to 127 deals last year while noting the value of those deals more than halved to $3.5 billion on the lack of major transactions.

Takeovers launched and completed last year were Spark NZ's hostile offer for TeamTalk; competing bids for Tower by Fairfax Financial and Vero Insurance; rival partial offers for New Zealand Oil & Gas by OG Oil & Gas and Zeta Energy; WSP's offer for Open International Consultants, and Yang Kee Logistics' bid for Fliway Group.

The final takeover offer from 2017 will be decided this week at a special meeting of Trilogy International shareholders, who have been offered $2.90 a share by China's Citic Capital Partners. The offer was a 28% premium to the trading price before the announcement. The scheme of arrangement involved requires 75% approval and at least half the voting rights to be cast.

Sources: sharechat.co.nz; businessdesk.co.nz

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Bell Gully’s James Cooney.