Knives out now for share offer red tape

By ELLEN READ

Plans to simplify the paperwork for transtasman share offers are a sensible move towards deregulation, according to one of the latest companies to offer shares in both New Zealand and Australia.

"It's a material improvement in terms of cost and time," John Grover, company secretary of Pacific Brands said.

The New Zealand and Australian Governments released a discussion paper yesterday on a proposal to allow companies to issue securities in both countries using a single set of documentation. Currently, New Zealand and Australian issuers cannot use their home jurisdiction offer documents when making a transtasman offer of securities.

Commerce Minister Margaret Wilson said mutual recognition of offers of securities and managed investment scheme interests would reduce barriers to cross-border commercial activity.

Wilson said the move would promote transtasman investment, enhance competition in capital markets, reduce business costs, and increase the choice for investors.

Pacific Brand's Grover said it was hard to break down the costs but estimated it cost the company between A$50,000 to A$100,000 ($57,000 to $114,000) in extra legal fees to produce the investor statement required to accompany a company's prospectus in New Zealand - excluding printing and distribution costs.

"The investment statement is largely duplicative of the prospectus anyway so it didn't offer any extra protection for investors," Grover said.

He said several regulatory inconsistencies - including employee share schemes and pre-prospectus advertising - remain a hurdle for companies.

Pacific Brands raised $1.46 billion in a transtasman share offer in March. The company listed on both countries' stock exchanges last month.

Ross Cameron, parliamentary secretary to the Australian Treasurer, said mutual recognition was part of a wider move towards co-ordination of business law between Australia and New Zealand.

"[It] will reduce the costs of raising capital ... while maintaining investor protection through appropriate disclosure," he said.

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