Members' scheme of arrangement proposed between two ASX–listed gold producing companies
Scheme intended to result in acquisition of the plaintiff by Genesis Minerals Limited
First court hearing seeking orders to convene meeting for the scheme and for the dispatch of explanatory statement to members
Quick Take
1At the first hearing of a scheme of arrangement under s 411(1) of the Corporations Act, the standard of review is whether the scheme is not inappropriate and is one that sensible businesspeople might consider of benefit to the scheme's members; the court does not scrutinise the commercial merits at this stage.
2A reimbursement fee representing less than 1% of the target company's equity value is consistent with Takeovers Panel Guidance Note 7 and established principle, and is not excessive where it is reciprocal and not triggered merely by failure to achieve the requisite voting majorities.
3Where a scheme booklet is necessarily lengthy due to factual complexity, adequate disclosure is achieved through proper organisation of material and placement of summary information to ensure intelligibility across a heterogeneous shareholder base.
