The Takeovers Code (the Code) applies to Kiwi companies that have 50 or more (voting) shareholders and share parcels, and (including subsidiaries) has total assets of at least NZ$30m or total revenue of at least NZ$15m at the end of the financial year.

Any company meeting that criteria is deemed to be a "Code company". The Takeovers Code governs certain transactions and events that impact on the voting rights attaching to the shares owned by shareholders of "Code companies".

The role of the Takeovers Panel and the Code is to ensure that all shareholders have a fair opportunity to participate in control-change transactions in Code companies (such as takeovers and certain allotments or acquisitions of parcels of shares). The Code also ensures that shareholders have adequate information to assist their decision-making for these transactions.

The Takeovers Panel has indicated that they are not averse to companies deciding to structure their holdings so that they do not fall under the definition of “Code company”, provided that the structuring is undertaken in a manner that complies with the Code. They have also released a partial exemption for small companies.

There are a number of structural options available to companies to avoid being classified as a "Code company". If you would like to discuss this further, or would like to receive additional information please get in contact with us.