Companies - application to the court to grant orders and approve scheme of arrangement.
Before : |
Sir Michael Cameron St. John Birt, Kt., Bailiff and Jurats Clapham and Liston. |
IN THE MATTER OF A REPRESENTATION BY FRM HOLDINGS LIMITED
AND IN THE MATTER OF ARTICLE 125 OF THE COMPANIES (JERSEY) LAW 1991.
Advocate J. D. Kelleher for the Representor.
Advocate M. W. Cook for the Purchaser.
Advocate M. P. Cushing for Sumitomo Mitsui Trust Bank Limited.
judgment
the bailiff:
1. This is an application by FRM Holdings Limited for an order under Article 125 of the Companies (Jersey) law 1991 for sanction of a Scheme of Arrangement to be made between the company and its shareholders.
2. The background is set out very clearly in the judgment of the court dated 18th June giving reasons for the decisions it had made when convening the required meetings of shareholders. In essence the Scheme involves the acquisition by RBH Holdings Jersey Limited, a subsidiary of Man Group plc of all the shares in the company for a cash and deferred cash consideration described in the Scheme. One of the shareholders, Sumitomo Mitsui Trust Bank ("SMTB") is transferring its shares privately outside the Scheme, but as we have heard this morning, it has undertaken to be bound by the Scheme.
3. At the preliminary hearing on 1st June, for the reasons set out in that judgment, the court ordered that the holders of the ordinary shares be in effect treated as two classes, namely the Loanholders Scheme Shareholders and the Non Loanholders Scheme Shareholders; so separate meetings have been held of those two groups.
4. The Court's task when considering whether to sanction a scheme is well established. In Re Computer Patent Annuities Holdings Limited [2010] JRC 021 the Court said this:-
"The Court must consider:-
(i) whether the provisions of the 1991 Law have been complied with;
(ii) whether the class of shareholders to be affected by the proposed scheme was fairly represented by those who attended the meeting and whether the statutory majority are acting bona fide and not coercing the minority in order to promote interests adverse to those of the class whom they purport to represent; and
(iii) whether the arrangement is such that an intelligent and honest man, a member of the class concerned and acting in respect of his interest might reasonably approve."
5. Now in relation to the first of those matters, we are satisfied that the circular described the Scheme fairly and that it has been circulated to the members. The relevant meetings have been held and the Scheme has been approved by more than 75% of the votes cast which is the minimum requirement of the Law.
6. As to the second issue we are satisfied that those who were represented at the meeting fairly represented the relevant classes of shareholders as a whole and that there is no evidence of any coercion of the minority; quite the contrary. In relation to the Loanholders Scheme Shareholder meeting all the shares in issue were present in person or by proxy and the voting was unanimous in favour of the Scheme; in other words 100% of the shares voted in favour. In relation to the Non Loanholders Scheme Shareholders, all but one shareholder were present in person or by proxyand the votes were unanimous in favour; so those voting in favour represented 99.29% of all the Non Loanholders Scheme Shares in issue.
7. As to the third issue, the Court notes the overwhelming votes in favour and the fact that the Scheme was considered to be fair and reasonable by Credit Suisse Securities Europe Limited which was the firm appointed by the board of directors to advise.
8. The Court has been advised that all the conditions referred to in the Scheme have been satisfied and the purchaser and SMTB have agreed unconditionally to be bound by the Scheme.
9. In all the circumstances we approve the Scheme and we make the order requested.
Authorities
Companies (Jersey) law 1991.
Re Computer Patent Annuities Holdings Limited [2010] JRC 021.