CIP Holdings Limited
[2025] NZHC 851
•9 April 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2025-404-369
[2025] NZHC 851
UNDER Part 15 of the Companies Act 1993 IN THE MATTER
of an application for orders approving a scheme of arrangement under Part 15 of the Companies Act 1993
CIP HOLDINGS LIMITED
Applicant
Hearing: 9 April 2025 Appearances:
M Eastwick-Field (via VMR), E R Gatenby and J M Windmeyer for the Applicant
M G Hay and A G Sargent for Crown TopCo Limited, Crown UK TopCo Limited and Crown Holdco Limited
Judgment:
9 April 2025
JUDGMENT OF GAULT J
This judgment was delivered by me on 9 April 2025 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………
Solicitors:
Ms M Eastwick-Field and Ms E R Gatenby, Russell McVeagh, Auckland
Ms L L Fraser, Ms L Bercovitch, Ms M G Hay and Ms A G Sargent, Chapman Tripp, Auckland
RE CIP HOLDINGS LIMITED [2025] NZHC 851 [9 April 2025]
[1] CIP Holdings Ltd (CIPH) applies by way of originating application for orders approving a scheme of arrangement (Scheme) under pt 15 of the Companies Act 1993 (the Act).
Background
[2] CIPH is an unlisted holding company. It is the sole shareholder and parent company of Craigs Investment Partners Limited (CIP), which is the main operating company and principal employer in the Craigs Investment Partners group of companies (CIPH Group). The CIPH Group is one of the largest investment advisory and banking firms in New Zealand.
[3] CIPH has approximately 390 current shareholders, who are current or former CIP employees, directors, or persons having a business-related arrangement with CIP, or entities (such as trusts or companies) controlled by such persons.
[4] In May 2024, the CIPH Group received an unsolicited investment proposal from leading non-resident global private equity firm TA Associates. Following negotiations and Heads of Terms, the parties entered into a Scheme Implementation Agreement dated 19 December 2024 (which has been amended by amendment agreements dated 30 January 2025 and 26 February 2025) (the SIA).
[5] The essential effect of the Scheme is that shareholders will sell half their interest in the CIPH Group for cash consideration and retain the remaining half of their interest in the CIPH Group via new shareholdings in CIP Holdings No. 2 Limited, a company recently incorporated in New Zealand (CIPH#2).
[6]The Scheme contemplates the transfer of all shares in CIPH, as follows:
(a)CIPH will become a wholly owned subsidiary of Crown HoldCo Limited, a company recently incorporated in New Zealand (New HoldCo);
(b)New HoldCo is and will remain wholly owned by Crown TopCo Limited, a company recently incorporated in New Zealand (New TopCo);
(c)New TopCo will be 50% owned by Crown UK TopCo Limited (UK TopCo), a company recently incorporated in the United Kingdom, and 50% owned by CIPH#2. UK TopCo is 100% owned by the TA XV Fund, which is comprised of limited partnerships incorporated in the Cayman Islands and managed by general partners of TA Associates Management, LP (referred to generally as TA Associates); and
(d)CIPH#2 will be wholly owned by the current CIPH shareholders, in the same proportions as their holdings of CIPH shares prior to implementation of the Scheme (subject to rounding where a shareholder holds an odd number of shares).
[7] The proposed transaction has been announced to shareholders and the public on CIP’s website and through other channels.
[8] An originating application for final orders sanctioning the Scheme was filed on 18 February 2025. An amended originating application was filed on 26 February 2025 (Final Orders Application) to reflect minor amendments to the Scheme Plan contained in the SIA.
Initial orders
[9] Following a teleconference on 26 February 2025, the Court granted and sealed initial orders in relation to the Scheme.1 The initial orders, among other things, directed CIPH to:
(a)convene a special meeting of shareholders to consider and vote on the Scheme (Scheme Meeting);
1 Minute dated 26 February 2025.
(b)at the Scheme Meeting, put to shareholders a resolution approving the scheme (Resolution); and
(c)in advance of the Scheme Meeting, distribute certain materials to CIPH’s shareholders, informing them about the Scheme, notifying them of the Scheme Meeting and providing instructions on how to vote (Scheme Meeting Materials).
Subsequent steps
[10]Since the initial orders were granted:
(a)on 17 March 2025, the Overseas Investment Office (OIO) consented under the Overseas Investment Act 2005 to the transfer of the shares of CIPH to New HoldCo;2
(b)on 19 March 2025, CIPH’s shareholders voted in support of the Scheme at a meeting;
(c)on 27 March 2025, the Takeovers Panel provided a statement confirming that it has no objection to the Court granting the Final Orders Application to approve the Scheme;
(d)no notice of opposition has been filed and served (with such notices required to be filed by 5:00 pm on 2 April 2025); and
(e)CIPH has not received any further proposals for the acquisition of CIPH.
[11]CIPH now seeks orders in terms of the Final Orders Application.
2 New HoldCo has confirmed the conditions of the OIO consent are acceptable to it and that it considers the OIO Condition has been satisfied.
Interested parties
[12] New Holdco, New Topco and UK Topco filed notices of appearance. They have also filed a memorandum of counsel supporting and consenting to orders being granted in the form sought by CIPH in the Final Orders Application.
Applicable legal principles
[13] Section 236(1) in Part 15 of the Act provides the Court’s jurisdiction to approve a scheme of arrangement subject to such terms and conditions as the Court thinks fit:
236 Approval of arrangements, amalgamations, and compromises
(1) Notwithstanding the provisions of this Act or the constitution of a company, the Court may, on the application of a company or any shareholder or creditor of a company, order that an arrangement or amalgamation or compromise shall be binding on the company and on such other persons or classes of persons as the Court may specify and any such order may be made on such terms and conditions as the Court thinks fit.
[14] An “arrangement” is defined only by inclusion in s 235 and the courts have interpreted “arrangement” broadly. The Scheme is within the scope of s 236.
[15] Section 236A provides special rules for an arrangement affecting “voting rights” of a “code company” as those terms are defined in s 2(1) of the Takeovers Act 1993. CIPH is a code company including because of its size for the purposes of s 2A of the Takeovers Act, and because the arrangement affects CIPH’s voting rights. As a result of the Scheme, the percentage of voting rights held in CIPH by New HoldCo will increase from 0% to 100%; the percentage of voting rights held by existing CIPH shareholders will decrease from 100% to 0%. Thus, s 236A applies. It provides:
236A Arrangement or amalgamation involving code company
(1)If a proposed arrangement or amalgamation affects the voting rights of a code company, the applicant for an order under section 236(1) must, at the same time as filing the application, notify the Takeovers Panel of the application.
(2)The court may not make an order under section 236(1) that affects the voting rights of a code company unless—
(a)the code company's shareholders approve the arrangement or amalgamation in accordance with subsection (4); and
(b)either of the following applies:
(i)the court is satisfied that the shareholders of the code company will not be adversely affected by the use of section 236(1) rather than the takeovers code to effect the change involving the code company; or
(ii)the applicant has filed a statement from the Takeovers Panel indicating that the Takeovers Panel has no objection to an order being made under section 236(1).
(3)The court need not approve a proposed arrangement or amalgamation merely because the Takeovers Panel has no objection to an order being made under section 236(1).
(4)For the purposes of subsection (2)(a), the code company's shareholders may only approve the arrangement or amalgamation in the following way:
(a)by a resolution approved by a majority of 75% of the votes of the shareholders in each interest class entitled to vote and voting on the question; and
(b)by a resolution approved by a simple majority of the votes of those shareholders entitled to vote.
(5)For the purposes of this section and section 236B,—
affects the voting rights, in respect of an arrangement or amalgamation, means an arrangement or amalgamation that involves a change in the relative percentage of voting rights held or controlled by 1 or more shareholders
interest class may be determined in accordance with the principles set out in Schedule 10
voting right has the meaning set out in section 2(1) of the Takeovers Act 1993.
[16] Thus, in this case a pre-condition to an order under s 236(1) is shareholder approval by:
(a)a majority of 75% of the votes of the shareholders in each interest class entitled to vote and voting; and
(b)a simple majority of the votes of those shareholders entitled to vote.
[17] Here, there is only one interest class. CIPH has only one class of shares. All of the shares (except treasury stock, which carries no voting rights) are fully paid-up ordinary shares with identical voting rights. Under the Scheme, each shareholder will receive the same consideration per share. Although certain shareholders had already agreed to vote in favour, I accepted in making the interim orders that they are not in a different intertest class. The Scheme has the same effect on them, and they get no collateral benefit.
[18] Section 237 provides that, without limiting s 236, the Court may make additional orders for the purpose of giving effect to any arrangement approved under that section. These include orders providing for and prescribing terms and conditions relating to the transfer or vesting of real or personal property, assets, rights, powers, interests, liabilities, contracts, and engagements.
[19] In exercising the Court’s broad discretion when deciding whether to approve a scheme under s 236,3 the four-part test to be applied is well-established. It was summarised in C M Banks Ltd,4 and more recently in a number of other cases in this Court,5 as being the duty of the Court to see:
(a)that there has been compliance with the statutory provisions as to meetings, resolutions, the application to the Court, and the like;
(b)that the scheme has been fairly put before the class or classes concerned; and that if a circular or circulars have been sent out, as is usual, whether before or after the making of the application to the Court, they give all the information reasonably necessary to enable the recipients to judge and vote upon the proposals;
(c)that the class was fairly represented by those who attended the meeting and that the statutory majority are acting bona fide and are not coercing the minority in order to promote interests adverse to those of the class whom they purport to represent; and
3 Weatherston v Waltus Property Investment Ltd [2001] 2 NZLR 103 (CA) at [31].
4 Re C M Banks Ltd [1944] NZLR 248, [1944] GLR 61 at 253.
5 See for example Re ACS (NZ) Ltd [2012] NZHC 1396 at [4]; Re Auckland International Airport [2014] NZHC 405 at [8]; Re Newplex Industries [2016] NZHC 1677 at [10]; Re Fliway Group Ltd [2017] NZHC 3216 at [8]; Re Trilogy International Ltd [2018] NZHC 580 at [14]; Re Methven Ltd [2019] NZHC 608 at [8]; Re Trade Me Group Ltd [2019] NZHC 840 at [11]; Re Metlifecare Ltd [2020] NZHC 2752 at [14]; Re Abano Healthcare Group Ltd [2020] NZHC 3343 at [21]; Re Tilt Renewables Ltd [2021] NZHC 1861 at [12]; Re Z Energy Ltd [2022] NZHC 841 at [14]; and Re Pushpay Holdings Limited [2023] NZHC 1083 at [29].
(d)that the scheme is such that an intelligent and honest person of business, a member of the class concerned and acting in respect of his [or her] interest, might reasonably approve.
[20] The Court of Appeal has said that it is apt to supplement this last limb with consideration of whether the arrangement is fair and equitable.6
Discussion
[21]I deal with these requirements in turn.
[22] First, I am satisfied that there has been compliance with the relevant statutory provisions. CIPH has complied with the Initial Orders granted in accordance with s 236(2) of the Act. For completeness, Ms Eastwick-Field, for CIPH, noted that CIPH’s email to shareholders confirming the results of the Scheme Meeting was sent prior to receipt of KPMG’s scrutineer’s report. However, the results notified in that email were subsequently verified by, and consistent with, the results as confirmed by the scrutineer. I accept that nothing therefore turns on the fact that the timing of this email was technically not as contemplated by initial order 15(a).
[23] At the shareholders’ meeting on 19 March 2025, shareholders passed the Resolution in accordance with the required thresholds for approval:
(a)in compliance with s 236A(4)(a) of the Act, 100% of the votes of shareholders entitled to vote and voting on the Resolution were cast in favour of the Resolution;
(b)in compliance with s 236A(4)(b) of the Act, the total votes cast in favour of the Resolution represented 97.31% of the total number of votes of those shareholders entitled to vote.
[24] As indicated, the Takeovers Panel provided a statement confirming that it has no objection to the Court granting the Final Orders Application to approve the Scheme.
6 Weatherston v Waltus Property Investment Ltd [2001] 2 NZLR 103 (CA) at [35].
[25] Certain of the Restructuring Steps set out in Schedule 8 of the SIA remain outstanding but I accept the submission that this should not preclude the Court’s approval of the Scheme. The Court has jurisdiction to grant final orders when a scheme is still subject to a condition.7 The outstanding steps do not require any amendment to the Scheme and the fact of these steps and their timing has been disclosed to, and approved by, shareholders.
[26]The Scheme is also conditional on, by 11:00 am on the Implementation Date:
(a)there being no Material Adverse Change (as defined in clause 1.1 of the SIA) occurring in relation to the CIPH Group;
(b)there being no judgment, order, restraint or prohibition enforced or issued by any government agency that prohibits, prevents or materially restricts the implementation of the Scheme; and
(c)none of the events listed at Schedule 1 of the SIA having taken place. By way of example, the Schedule contemplates events such as:
(i)changes to the capital structure of any member of the CIPH Group (including share issues, reclassifications and share buybacks);
(ii)disposal of the whole or a substantial part of the CIPH Group's business or property;
(iii)an unresolved insolvency event affecting any member of the CIPH Group; or
(iv) amalgamations by members of the CIPH Group, (together, Negative Conditions).
7 Re Arvida Group Ltd [2024] NZHC 3053 at [17]–[18].
[27] Since the Implementation Date post-dates Court approval, there remains the potential for any of the Negative Conditions to be breached after Court approval. However, I accept that the Court may approve the Scheme notwithstanding the outstanding Negative Conditions.8 The Negative Conditions were disclosed to shareholders in the Scheme Meeting Materials and therefore shareholders gave their approval of the Scheme in knowledge of them. Further, CIPH and TA Associates are not aware of any breaches of the Negative Conditions. They have no reason to believe these Negative Conditions will be breached.
[28] Secondly, I am satisfied that the scheme has been fairly put before the shareholders with all the information reasonably necessary to enable them to judge and vote upon the proposals. The Scheme Meeting Materials were sent by email to all shareholders listed at the relevant time, and to the others specified, in compliance with the initial orders. Hard copies were made available. The Scheme Meeting Materials included the Independent Advisor’s report (IAR). They were also reviewed by the Takeovers Panel. The Scheme Meeting Materials fairly represented and explained the Scheme. The Scheme Meeting was conducted in accordance with the initial orders and CIPH’s constitution. I note there was a question at the meeting whether the terms of the Scheme, in particular the cash consideration payable, will become public. In response, it was confirmed that there have been confidentiality orders granted by the Court. Those orders were interim but I do not consider the answer created an issue. The Scheme Meeting Materials indicated that confidentiality orders would be sought and the interim orders were also provided. It is most unlikely the concern about confidentiality affected the decision to approve.
[29] Thirdly, I am satisfied that the single class was fairly represented by those who attended the meeting and that the statutory majority are acting bona fide and are not coercing the minority. The overwhelming shareholder support for the scheme and the absence of any opposition are indicators of fair representation and good faith at the meeting.9
8 Re Trade Me Group Ltd [2019] NZHC 840 at [21], citing Re Methven Ltd [2019] NZHC 608 at [10].
9 Re MHM Automation Ltd [2024] NZHC 532 at [39]–[41]; and Re Arvida Group Ltd [2024] NZHC 3053 at [14]. See also Re Pushpay Holdings Ltd [2023] 1083 at [36]–[37]; Re Abano Healthcare Group Ltd [2020] NZHC 3343 at [34]; and Re Methven Ltd [2019] NZHC 608 at [9(c)].
[30] Fourthly, I am also satisfied that the Scheme is such that an intelligent and honest person of business acting in respect of his or her interest, might reasonably approve, and is generally fair and equitable. As well as the overwhelming support of shareholders, CIPH’s board has unanimously supported the Scheme. The directors have reached the view that the Scheme is in the best interests of shareholders.
[31]Further, shareholders will receive a premium:
(a)the consideration to be received is [REDACTED] the valuation range for the CIPH target business assessed by the Independent Adviser; and
(b)the consideration represents a [REDACTED] premium relative to the last traded price of CIPH shares (in May 2024).10
[32]No third party has opposed the application to raise any issue of prejudice.11
[33] In all the circumstances, I am satisfied that the Scheme should be approved. The orders sought are appropriate.
Confidentiality
[34] CIPH seeks to maintain confidentiality over certain aspects of the Scheme Plan and other documents on the Court file. In relation to the Scheme Plan to be attached to the Final Orders sought, which would otherwise become public since CIPH will be required to upload (or otherwise deliver) a copy to the Registrar of Companies for registration, CIPH proposes omitting the appendix, and replacing the following amounts specified with a reference to “Confidential Information”:
(a)in the definition of “Cash Consideration” (at page 2 of the Scheme Plan);
10 The IAR notes that this is not uncommon where share trading is carried out in a “restricted market” (limited to employees), such as CIPH’s “grey market”.
11 The CIPH Group has only one material creditor, ANZ Bank New Zealand Limited (ANZ). CIPH Group and ANZ have been negotiating terms for amendment of the existing financing arrangements. CIPH expects that the relevant terms will be finalised very shortly and that the financing arrangements will continue post-implementation of the Scheme. Also, implementation of the Scheme will [REDACTED].
(b)in the definition of “Escrow Amount” (at page 4 of the Scheme Plan);
(c)in the definition of “Holdback Amount” (at page 4 of the Scheme Plan);
(d)in the definition of “Target Working Capital Amount” (at page 5 of the Scheme Plan);
(e)in the definition of “W&I Contribution” (at page 5 of the Scheme Plan);
(f)in clause 3.2(c) as the anticipated Estimated Adjustment Amount (at page 8 of the Scheme Plan); and
(g)in clause 3.3(b) as the payment to be made in the event the Adjustment Amount is a negative amount (at page 8 of the Scheme Plan).
[35] The Court has the power to make permanent confidentiality orders in cases where there are specific adverse consequences sufficient to justify an exception to the fundamental principle of open justice.12
[36] CIPH is an unlisted, privately held company. I am satisfied that the appendix, which discloses inner workings of the CIPH Group’s finances, and the specified amounts itemised in [34] above, are confidential, commercially sensitive information and should not be published as part of the Final Orders. This will not affect the public’s ability to understand the nature of the Scheme.
[37] CIPH also seeks a final order continuing the interim order that the Final Orders Application, all interlocutory applications, affidavits, memoranda, and all other documents related to the approval of the Scheme on the Court file shall not be searched, inspected, or copied without further order of the Court.
[38] The documents containing the confidential information identified in [36] above should not be searched unless the information otherwise ceases to be confidential. Beyond that, I accept that the Court file contains other information that is confidential,
12 Erceg v Erceg [2016] NZSC 135; [2017] 1 NZLR 310 at [13].
commercially sensitive information. Such other information falls into the following two categories:
(a)the transaction that is the subject of the Scheme; or
(b)the underlying CIP business, valuation and plans.
[39] However, I also accept that it is neither practicable nor necessary for CIPH to provide redacted versions of all documents on the Court file at this stage and that it is preferable for any future request for access to the Court file to be addressed in the circumstances prevailing at the time, including the purpose of the request and what information remains confidential. So as to enable the Court to consider the two categories identified and the extent of any confidential, commercially sensitive information in the context of the circumstances prevailing at the time of the request, I consider it is appropriate to order that the Court file (except the formal court record) not be searched, inspected, or copied without further order of the Court.
[40] Finally, this judgment is not to be published for 24 hours to give counsel an opportunity to make submissions by memorandum filed before 12:00 pm tomorrow as to any appropriate confidentiality redactions in any public version of the judgment.
Result
[41]I make the following orders:
(a)the scheme of arrangement described in the Scheme Plan (as amended by amendment agreement dated 26 February 2025) contained in the Scheme Implementation Agreement dated 19 December 2024, between the parties listed in paragraphs (b)(i) to (v) below (a consolidated copy of which (with the appendix and confidential information specified in
[34] above omitted) is located at Schedule 1 of this judgment) (Scheme) is approved;
(b)the Scheme is binding with immediate effect upon:
(i)CIP Holdings Limited;
(ii)CIP Holdings No. 2 Limited;
(iii)Crown HoldCo Limited;
(iv)Crown TopCo Limited;
(v)Crown UK TopCo Limited;
(vi)every person who is a Scheme Shareholder (as defined in the Scheme Plan) at 5:00 pm (New Zealand Time) on the Record Date (also defined in the Scheme Plan); and
(vii)such other persons as necessary to give effect to the Scheme;
(c)CIPH is granted leave to apply to the Court for approval of any amendment, modification, or supplement to the Scheme;
(d)the documents containing the confidential information identified in
[36] above should not be searched unless the information otherwise ceases to be confidential;
(e)the Court file (except the formal court record) not be searched, inspected, or copied without further order of the Court; and
(f)this judgment is not to be published for 24 hours to give counsel an opportunity to make submissions by memorandum filed before 12:00 pm tomorrow as to any appropriate confidentiality redactions in any public version of the judgment.
Gault J
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