Konekt Limited, in the matter of Konekt Limited (No 2) [2019] FCA 1997

Konekt Limited, in the matter of Konekt Limited (No 2) [2019] FCA 1997

The Court approved despatch of the amended supplementary scheme booklet because the new competing proposals and APM's increased cash consideration were material to Konekt shareholders' decision how to vote, the disclosure had been verified and did not appear misleading, ASIC did not oppose the orders, and the...

Source-derived case information.

Jurisdiction
Australia
Judgment Date
22 November 2019
Procedural Posture
Corporations; Members' Scheme of Arrangement; Application Under S 1319 of the Corporations Act 2001 (cth) / Application for Orders Approving Despatch of an Amended Supplementary Scheme Booklet Before the Scheme Meeting and Before Any Application to Approve the Scheme
Outcome
Application granted; amended supplementary scheme booklet approved for despatch and proceedings stood over for the hearing of any application to approve the scheme.
Legal Topics
["members' Scheme of Arrangement" 'supplementary Scheme Booklet' 'competing Takeover Scheme Proposals' 'break Fee or Reimbursement Fee' 'shareholder Disclosure']
['corporations Law'] ["members' Scheme of Arrangement" 'supplementary Scheme Booklet' 'competing Takeover Scheme Proposals' 'break Fee or Reimbursement Fee' 'shareholder Disclosure']

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Procedural Posture

Corporations; Members' Scheme of Arrangement; Application Under S 1319 of the Corporations Act 2001 (cth) / Application for Orders Approving Despatch of an Amended Supplementary Scheme Booklet Before the Scheme Meeting and Before Any Application to Approve the Scheme

Legal Issues

  1. 1 ['Whether the Court should make orders under s 1319 of the Corporations Act 2001 (Cth) approving despatch of the amended supplementary scheme booklet to Konekt shareholders.' "Whether the amended supplementary scheme booklet adequately disclosed material events since distribution of the scheme booklet, including competing proposals and APM's revised offer." "Whether the Revised Reimbursement Fee, which exceeded the Takeover Panel's 1% guidance, would be a reason to refuse approval of the scheme at the final court hearing."]

Ratio Decidendi

The Court approved despatch of the amended supplementary scheme booklet because the new competing proposals and APM's increased cash consideration were material to Konekt shareholders' decision how to vote, the disclosure had been verified and did not appear misleading, ASIC did not oppose the orders, and the Revised Reimbursement Fee, although slightly above the Takeover Panel's 1% guidance, was commercially negotiated, disclosed, not triggered by a shareholder no-vote, had not deterred competition and was supported by evidence that APM's costs were likely to exceed it substantially.

Court Disposition

Application granted; amended supplementary scheme booklet approved for despatch and proceedings stood over for the hearing of any application to approve the scheme.

Orders

  • ['Pursuant to s 1319 of the Corporations Act 2001 (Cth), the supplementary disclosure substantially in the form of exhibit 6 be despatched to Konekt shareholders by email to shareholders who elected electronic communications, by pre-paid ordinary post to Australian postal addresses for other shareholders, and by...