Sir Michael Birt, Kt., Bailiff, and Jurats Olsen and Liston
IN THE MATTER OF THE REPRESENTATION BY INFORMA PLC
AND IN THE MATTER OF ARTICLES 63 AND 125 OF THE COMPANIES (JERSEY) LAW 1991
Advocate M. H. Temple for the Representor.
1. Informa Plc, to which we shall refer to as "the Company," is a company incorporated in Jersey. It is the holding company for the Informa Group and its shares are listed on the London Stock Exchange. It is presently resident for tax purposes in Switzerland.
2. Following recent changes in United Kingdom corporate taxation it is now wished to move the tax residence of the group holding company back to the United Kingdom. To this end a new company Informa Limited (to which we shall refer as "New Informa") has been incorporated in England and Wales. Under the scheme all the existing shares in the Company will be cancelled with a consequent temporary reduction in share capital. An equivalent number of new shares in the Company will be issued immediately to New Informa, thereby making the Company a wholly owned subsidiary of New Informa. In exchange for their scheme shares the shareholders in the Company will receive an equivalent number of ordinary shares in New Informa. The upshot will be that immediately following the scheme all persons who were shareholders in the Company will now be shareholders in New Informa holding an equal number of shares having the same value as their shares in the Company. On 10th April the Court convened the necessary meetings required by Article 125 of the Companies (Jersey) Law 1991 ("the 1991 Law").
3. The matter before us this morning is the application by the Company for sanction of the scheme following the holding of the necessary court meeting. The test which the Court applies on such applications is well established. It is three-fold and 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.
4. As to (i) the Court has received affidavit evidence. We are satisfied the scheme circular was circulated to the shareholders, that it explained matters fairly and that the necessary court meeting was held in accordance with the directions of the Court at which the relevant majority required by Article 125 was achieved.
5. As to (ii) there is only one class of shareholder in the Company. At the meeting 73.71% of the aggregate issued share capital in the Company was represented by shareholders attending in person or by proxy. Over 99.99% of the shares represented at that meeting were voted in favour of the scheme. The Court is accordingly satisfied that there was a fair representation of shareholders at the meeting and that a substantial majority voted in favour. There being only one class, there can be no question of coercion of any minority.
6. As to (iii) the reasons for the scheme were clearly set out in the scheme circular and related to the tax residence of the Company. Furthermore, the board of directors, which includes a majority of independent non-executive directors, unanimously recommended shareholders to vote in favour of the scheme. We are quite satisfied from the evidence before us that the scheme is indeed such that an intelligent and honest shareholder might reasonably approve of the scheme.
7. Finally the Court must consider whether to grant its sanction to the reduction of share capital which is part of the scheme. This is a very technical reduction of share capital as mentioned. The reduction, which was approved by special resolution, forms an integral part of the scheme. All the existing shares in the Company are to be cancelled but they will be immediately replaced by an equal number of new shares in the Company issued to New Informa. There will be no reduction in the assets of the Company. The matter has been fully explained to shareholders and there is no prejudice to the creditors. In the circumstances we see no need to apply Article 62(3)-(5) and we are content to sanction the reduction.
8. In the circumstances we grant our approval in the terms of the draft act produced to us.
Companies (Jersey) Law 1991.