Straits Resources Limited, in the matter of Straits Resources Limited [2010] FCA 1467

Straits Resources Limited, in the matter of Straits Resources Limited [2010] FCA 1467

The Court made orders convening the Acquisition Scheme Meeting because the proposed acquisition scheme was sufficiently disclosed, involved one class of shareholders, had appropriate safeguards for performance risk, contained acceptable deal protection provisions including a break fee within the 1% guideline, and the unresolved ATO Part IVA issue could appropriately be managed by holding the meeting after the expected ATO clarification and by further disclosure or adjournment if necessary.

Jurisdiction
Australia
Judgment Date
20 December 2010
Procedural Posture
Corporations Act 2001 (cth) S 411 Scheme of Arrangement / First Court Hearing for Orders Convening Scheme Meeting
Outcome
Orders made convening the Acquisition Scheme Meeting and giving related directions and exemptions.
Legal Topics
['scheme of Arrangement' 'acquisition Scheme' 'demerger Scheme' 'shareholder Meetings' 'class Composition' 'deal Protection Provisions' 'performance Risk' 'tax Implications']
['corporations Law'] ['scheme of Arrangement' 'acquisition Scheme' 'demerger Scheme' 'shareholder Meetings' 'class Composition' 'deal Protection Provisions' 'performance Risk' 'tax Implications']

Case Brief

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Procedural Posture

Corporations Act 2001 (cth) S 411 Scheme of Arrangement / First Court Hearing for Orders Convening Scheme Meeting

Legal Issues

  1. 1 ['Whether the Court should order Straits to convene a meeting of shareholders to consider the proposed Acquisition Scheme.' "Whether Standard Chartered PE's rights and voting agreements or the treatment of participants in the Straits Employee Share Scheme Acquisition Plan created separate classes of shareholders." 'Whether performance risk was adequately addressed by safeguards.' 'Whether the deal protection provisions, including exclusivity, no talk, no due diligence restrictions and break fee, were acceptable.' 'Whether uncertainty about possible Part IVA tax consequences should prevent the Scheme Meeting from being convened.']

Ratio Decidendi

The Court made orders convening the Acquisition Scheme Meeting because the proposed acquisition scheme was sufficiently disclosed, involved one class of shareholders, had appropriate safeguards for performance risk, contained acceptable deal protection provisions including a break fee within the 1% guideline, and the unresolved ATO Part IVA issue could appropriately be managed by holding the meeting after the expected ATO clarification and by further disclosure or adjournment if necessary.

Court Disposition

Orders made convening the Acquisition Scheme Meeting and giving related directions and exemptions.

Orders

  • ['Pursuant to subsection 411(1) of the Corporations Act 2001 (Cth), Straits convene a meeting of holders of ordinary shares to consider and, if thought fit, agree to the Scheme.' 'The Scheme Meeting be held at 11:00 am (Perth time) on 25 February 2011 at The Celtic Club, 48 Ord Street, West Perth, Western...