A gap between the number of cashed-up
investors and the availability of good quality New Zealand assets will
see a sellers’ market in 2017, resulting in strong price expectations,
Chapman Tripp predicts.
“There has been a tremendous amount of
capital raised by investors both domestically and offshore that needs to
find a home,” says Tim Tubman, who heads Chapman Tripp’s corporate team
“These investors include flush corporates, financial
investors and private equity firms – typically astute investors who are
on the hunt for good-quality assets. However, we don’t expect investors
to buy for the sake of buying, nor bid assets up to unrealistic levels,
as occurred prior to the GFC.”
This, combined with the continued
availability of debt finance, a weaker New Zealand dollar, continued
interest from Chinese investors and increasing role of iwi in domestic
deals as they look to diversify their investments, will contribute to
the imbalance between supply and demand for strong local assets, he
Recent M&A activity has been robust, with the year
kicking off with ANZ’s sale of UDC Finance to HNA Group, Spark’s
takeover offer for TeamTalk, the now-contested acquisition of Tower by
Fairfax Financial Holdings and Tenon Clearwood LP’s purchase of Tenon’s
New Zealand-based Clearwood operations.
Chapman Tripp has today released its annual publication – New Zealand Mergers and Acqusitions - trends and insights – which reflects on the previous year and identifies predictions for 2017.
heightened global and domestic uncertainty, we remain optimistic for
M&A in 2017, but we do expect a slowdown in activity prior to the
general election in September, and the year has already shown that
regulatory intervention can and will have a major impact on
For more information about China/New Zealand M&A activity, refer to our supplementary Mergers and Acquisitions - China/New Zealand trends and insights publication.