Lion Nathan Australia Pty Ltd (ACN 008 596 370) v Coopers Brewery Ltd (ACN 007 871 409) [2005] FCA 1426

Lion Nathan Australia Pty Ltd (ACN 008 596 370) v Coopers Brewery Ltd (ACN 007 871 409) [2005] FCA 1426

There is a serious question to be tried whether the initial and supplementary Explanatory Memoranda given to shareholders regarding the proposed resolution to amend Coopers' constitution were misleading and not a full and fair statement of matters required for shareholders to make a properly informed judgment. The memoranda failed to make explicit the practical consequence that passing the resolution would terminate the Lion Nathan takeover offer at $260 per share and did not provide sufficient information regarding alternative share value. Accordingly, until a consolidated and comprehensive explanatory memorandum is prepared, the company and the directors should be restrained from...

Jurisdiction
Australia
Judgment Date
11 October 2005
Procedural Posture
Interlocutory Application / Judgment on Applications for Interlocutory Injunction and Related Relief
Outcome
Injunction granted in VID 1196 of 2005 restraining the conduct of the shareholders’ meeting until further order and with liberty to apply; in VID 1195 of 2005, interlocutory relief refused.
Legal Topics
['disclosure Obligations of Directors' 'misleading or Deceptive Conduct' 'shareholder Rights' 'company Constitution' 'takeovers and Pre Emptive Rights']
['corporations Law' 'equity' 'trade Practices'] ['disclosure Obligations of Directors' 'misleading or Deceptive Conduct' 'shareholder Rights' 'company Constitution' 'takeovers and Pre Emptive Rights']

Case Brief

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Procedural Posture

Interlocutory Application / Judgment on Applications for Interlocutory Injunction and Related Relief

Legal Issues

  1. 1 ['Whether the Explanatory Memorandum to shareholders was misleading or deceptive or failed to make full and fair disclosure as required by law' "Whether shareholders should receive a Target's Statement before voting on a resolution affecting a takeover offer" "Whether the third tier pre-emptive rights under the company's constitution were properly disclosed" 'Whether a company (ACN 116 149 092 Pty Ltd) was entitled to be registered as a shareholder and participate in a general meeting']

Ratio Decidendi

There is a serious question to be tried whether the initial and supplementary Explanatory Memoranda given to shareholders regarding the proposed resolution to amend Coopers' constitution were misleading and not a full and fair statement of matters required for shareholders to make a properly informed judgment. The memoranda failed to make explicit the practical consequence that passing the resolution would terminate the Lion Nathan takeover offer at $260 per share and did not provide sufficient information regarding alternative share value. Accordingly, until a consolidated and comprehensive explanatory memorandum is prepared, the company and the directors should be restrained from...

Court Disposition

Injunction granted in VID 1196 of 2005 restraining the conduct of the shareholders’ meeting until further order and with liberty to apply; in VID 1195 of 2005, interlocutory relief refused.

Orders

  • ['The defendants (Coopers and its directors) are restrained from proceeding further with the conduct of the general meeting of shareholders convened for 20 October 2005 (other than to adjourn it) until further order.' "Liberty to apply is reserved to the defendants on 24 hours' written notice to vary or discharge...