first hearing to convene meeting of members pursuant to s 411(1) of the Corporations Act 2001 (Cth)
proposal for acquisition of 100% of shares in plaintiff in exchange for shares in bidder
Quick Take
1Where a scheme of arrangement involves concurrent demerger of assets conducted by way of capital reduction rather than as part of the scheme itself, the court at the first hearing will assess whether the demerger's treatment of small or ineligible shareholders is oppressive in light of the transaction as a whole, including the proportionality between the demerger and the scheme, reserving fuller assessment for the second hearing if the scheme is passed.
2Standard sale facility processes for ineligible foreign shareholders and small parcel holders under a scrip-for-scrip scheme are not class-creating, and the existence of unquoted securities (options and performance rights) dealt with outside the scheme by cancellation deeds conditional on scheme implementation does not create separate classes of shareholders for voting purposes.
3Where a bidder provides a loan facility to the scheme company, the court will assess whether the loan terms are coercive to shareholders in the event the scheme does not proceed, having regard to the repayment period, interest rate and circumstances in which enhanced interest accrues.
