Uniti Group Limited, in the matter of Uniti Group Limited [2022] FCA 671

Uniti Group Limited, in the matter of Uniti Group Limited [2022] FCA 671

Due to the differing rights and obligations of the rollover shareholders (including contractual agreements to vote in favour and entitlement to scrip consideration), they must form a separate class and separate meetings are required. The Scheme is procedurally and substantively fit for consideration, satisfies statutory requirements, and is not unfair or inappropriate to the extent of forestalling shareholder consideration. The treatment of options and performance rights does not necessitate further class separation. Any potential financial assistance arising from payment of the permitted dividend is not unlawful or would be otherwise permitted, on the evidence.

Parties
Plaintiff: Uniti Group Limited; Bidder: MBC BidCo Pty Ltd; Regulator: Australian Securities and Investments Commission (ASIC); Rollover Shareholder: Michael John Simmons; Rollover Shareholder: Luab Unit Trust (trustee: Michael John Simmons); Rollover Shareholder: Geoff William Aldridge (as trustee for Arsenal Aldridge Trust)
Jurisdiction
Australia
Judgment Date
07 June 2022
Procedural Posture
Corporations – Scheme of Arrangement / First Court Hearing – Orders for Convening Meetings
Outcome
Orders made as sought. First court hearing orders granted.
Legal Topics
Scheme of Arrangement, Class Meetings of Shareholders, Financial Assistance, Directors' Recommendation, Performance Rights and Options
Corporations Law Scheme of Arrangement Class Meetings of Shareholders Financial Assistance Directors' Recommendation Performance Rights and Options

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Parties

Uniti Group Limited

Plaintiff

MBC BidCo Pty Ltd

Bidder

Australian Securities and Investments Commission (ASIC)

Regulator

Michael John Simmons

Rollover Shareholder

Luab Unit Trust (trustee: Michael John Simmons)

Rollover Shareholder

Geoff William Aldridge (as trustee for Arsenal Aldridge Trust)

Rollover Shareholder

Procedural Posture

Corporations – Scheme of Arrangement / First Court Hearing – Orders for Convening Meetings

Legal Issues

  1. 1 Is it appropriate to order two separate meetings of shareholders (separate classes) for the proposed scheme of arrangement under s 411(1) of the Corporations Act 2001 (Cth)?
  2. 2 Does the Scheme meet the procedural and substantive requirements to proceed to the meetings stage?
  3. 3 Is the Scheme fit for consideration at shareholder meetings?

Ratio Decidendi

Due to the differing rights and obligations of the rollover shareholders (including contractual agreements to vote in favour and entitlement to scrip consideration), they must form a separate class and separate meetings are required. The Scheme is procedurally and substantively fit for consideration, satisfies statutory requirements, and is not unfair or inappropriate to the extent of forestalling shareholder consideration. The treatment of options and performance rights does not necessitate further class separation. Any potential financial assistance arising from payment of the permitted dividend is not unlawful or would be otherwise permitted, on the evidence.

Court Disposition

Orders made as sought. First court hearing orders granted.

Orders

  • MBC BidCo Pty Ltd is granted leave to be heard without being a party.
  • Uniti to convene and hold two meetings: one for general shareholders and one for rollover shareholders, to consider and, if thought fit, approve the Scheme.