Konekt Limited, in the matter of Konekt Limited (No 2)

In the case of Konekt Limited, No 2, the Federal Court was asked to decide whether to approve the despatch of a supplementary scheme booklet by Konekt Limited ahead of a scheme meeting. The company was the subject of competing takeover proposals and sought to provide shareholders with information about a revised offer made by APM. The legal issues before the Court included whether the supplementary disclosure was necessary and whether it contained accurate and non-misleading information. Given the competing takeover proposals, the Court found that the supplementary booklet was necessary to inform shareholders about the revised offer and its terms.

The Court found that the supplementary disclosure should be approved for despatch because the increased consideration offered by APM and the terms of that offer were critical to shareholders' decision-making. The supplementary booklet had been subject to a verification process to ensure its accuracy, and no objections had been raised by ASIC. The Court was satisfied that the information in the supplementary booklet was not misleading and that the Revised Reimbursement Fee, while slightly exceeding the Takeover Panel's guidance, did not deter a competitive bidder. The Court concluded that the supplementary booklet should be despatched to shareholders as it contained material information that was relevant to their decision at the scheme meeting.

The Court granted the application under section 1319 of the Corporations Act, ordering that the amended supplementary scheme booklet be despatched to shareholders in the manner specified. The Court also dispensed with certain compliance requirements, except for specific provisions, and stood over the proceedings for the hearing of any application to approve the scheme. The plaintiff was granted liberty to apply, and the orders were to be entered forthwith.