Dee Valley Group Plc, Re Companies Act 2006

Dee Valley Group Plc, Re Companies Act 2006

The Chairman was justified in rejecting the votes of the Individual Shareholders because their acquisition of single shares was part of a share manipulation strategy to defeat the Scheme, not for the benefit of the class as a whole. The court, exercising its discretion, sanctioned the Scheme as statutory requirements were met and the class was fairly represented.

Parties
Applicant: Dee Valley Group plc; Scheme Proponent: Severn Trent Water Limited; Scheme Supporter: James Sharp (Rulegate Nominees) Limited; Scheme Opponent: Ancala Fornia Limited; Scheme Opponents: Individual Shareholders (Mr Huw Cashmore, Mr John Williams, Mr Stuart Owen, Mr George Owen, Mr Stephen Jones, Ms Angelina Blower, Ms Johanna Cooke)
Jurisdiction
England and Wales
Judgment Date
08 February 2017
Procedural Posture
Scheme of Arrangement / Sanction Hearing
Outcome
Scheme sanctioned
Legal Topics
Schemes of Arrangement, Shareholder Voting, Majority in Number Test, Share Splitting, Court's Discretion
Company Law Corporate Finance Schemes of Arrangement Shareholder Voting Majority in Number Test Share Splitting Court's Discretion

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Parties

Dee Valley Group plc

Applicant

Severn Trent Water Limited

Scheme Proponent

James Sharp (Rulegate Nominees) Limited

Scheme Supporter

Ancala Fornia Limited

Scheme Opponent

Individual Shareholders (Mr Huw Cashmore, Mr John Williams, Mr Stuart Owen, Mr George Owen, Mr Stephen Jones, Ms Angelina Blower, Ms Johanna Cooke)

Scheme Opponents

Procedural Posture

Scheme of Arrangement / Sanction Hearing

Legal Issues

  1. 1 What is the proper test for validity of votes at a class meeting directed by the court?
  2. 2 Were the votes of the Individual Shareholders valid and should they have been counted?
  3. 3 Does the court have discretion to approve the Scheme if the Chairman was wrong to reject the votes?

Ratio Decidendi

The Chairman was justified in rejecting the votes of the Individual Shareholders because their acquisition of single shares was part of a share manipulation strategy to defeat the Scheme, not for the benefit of the class as a whole. The court, exercising its discretion, sanctioned the Scheme as statutory requirements were met and the class was fairly represented.

Court Disposition

Scheme sanctioned

Orders

  • Scheme of arrangement between Dee Valley Group plc and its members approved and sanctioned under section 899(1) of the Companies Act 2006.
  • Chairman’s rejection of Individual Shareholders’ votes upheld.