GW Pharmaceuticals PLC, Re (Part 26 of the Companies Act 2006)

GW Pharmaceuticals PLC, Re (Part 26 of the Companies Act 2006)

The court directed that for the purposes of the headcount test under section 899(1) Companies Act 2006, a member who splits its vote (either directly or via multiple proxies) shall be treated as voting in favour of the scheme if more votes are cast for than against, and otherwise as voting against. The court rejected the approach of fractionalising members or looking through to beneficial owners for headcount purposes, and permitted the appointment of multiple proxies for the Court Meeting.

Parties
Applicant: GW Pharmaceuticals plc; Proposed Acquirer: Jazz Pharmaceuticals UK Holdings Limited; Parent of Proposed Acquirer: Jazz Pharmaceuticals Public Limited Company
Jurisdiction
England and Wales
Judgment Date
25 March 2021
Procedural Posture
Scheme of Arrangement (companies Act 2006, Part 26) / Application for Convening Order
Outcome
Application granted
Legal Topics
Scheme of Arrangement, Headcount Test, Proxy Voting, Shareholder Meetings
Company Law Scheme of Arrangement Headcount Test Proxy Voting Shareholder Meetings

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Parties

GW Pharmaceuticals plc

Applicant

Jazz Pharmaceuticals UK Holdings Limited

Proposed Acquirer

Jazz Pharmaceuticals Public Limited Company

Parent of Proposed Acquirer

Procedural Posture

Scheme of Arrangement (companies Act 2006, Part 26) / Application for Convening Order

Legal Issues

  1. 1 How should votes be counted for the headcount test under section 899(1) Companies Act 2006 when a member splits its vote or appoints multiple proxies, particularly in the context of a depositary holding the majority of shares?
  2. 2 Is it appropriate to allow the appointment of multiple proxies and split voting at the Court Meeting for the scheme of arrangement?

Ratio Decidendi

The court directed that for the purposes of the headcount test under section 899(1) Companies Act 2006, a member who splits its vote (either directly or via multiple proxies) shall be treated as voting in favour of the scheme if more votes are cast for than against, and otherwise as voting against. The court rejected the approach of fractionalising members or looking through to beneficial owners for headcount purposes, and permitted the appointment of multiple proxies for the Court Meeting.

Court Disposition

Application granted

Orders

  • Order convening a meeting of members to consider the scheme of arrangement, with directions permitting multiple proxies and the specified headcount test treatment.