Panbio Limited (ABN 19 010 728 220) No 2, in the matter of Panbio Limited (ABN 19 010 728 220)

[2007] FCA 2101

FEDERAL COURT OF AUSTRALIA

Panbio Limited (ABN 19 010 728 220) No 2, in the matter of Panbio Limited
(ABN 19 010 728 220) [2007] FCA 2101

IN THE MATTER OF PANBIO LIMITED (ABN 19 010 728 220)

NSD2165 OF 2007

EMMETT J

20 DECEMBER 2007

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD2165 OF 2007

IN THE MATTER OF PANBIO LIMITED (ABN 19 010 728 220)

PANBIO LIMITED (ABN 19 010 728 220) Plaintiff
JUDGE:	EMMETT J
DATE OF ORDER:	20 DECEMBER 2007
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Pursuant to subsection 411(4)(b) of the Corporations Act 2001 (Cth) (Corporations Act), the scheme of arrangement between Panbio Limited ABN 19 010 728 220 (Panbio) and of the holders of ordinary shares in Panbio, other than the holders of Excluded Shares in respect of those Excluded Shares, in the form annexed hereto and marked “A” be approved.

2.Pursuant to subsection 411(12) of the Corporations Act, Panbio be exempted from compliance with subsection 411(11) of the Corporations Act in relation to Order 1.

3.These Orders be entered forthwith.

In these orders, an Excluded Share is a fully paid ordinary share in Panbio held by Inverness Medical Innovations, Inc. (Inverness) or by any person on behalf of or for the benefit of Inverness.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Scheme

pursuant to section 411 of the Corporations Act

between

PANBIO LIMITED (ABN 19 010 728 220)

and

SCHEME PARTICIPANT

1         Preliminary

1.1Panbio is a public company incorporated in Australia and registered in Queensland and is a company limited by shares.

1.2At 30 October 2007, 62,509,280 Shares were on issue.

1.361,955,093 Shares are quoted on ASX.

1.4Inverness is a company incorporated in Delaware in the United States of America.

1.5Inverness Australia is a proprietary company incorporated in Australia and registered in Victoria and is a company limited by shares.

1.6If this Scheme becomes Effective, then:

(a)in consideration for the transfer of each Scheme Share to Inverness Australia:

(i)Inverness will pay, or cause its nominee to make payment of, the Scheme Consideration to Panbio (or a payment agent acting for Panbio) on behalf of each Scheme Participant within 2 Business Days of the Record Date; and

(ii)Panbio will pay or procure the payment of the Scheme Consideration to each Scheme Participant in respect of each Scheme Share held by the Scheme Participant as at the Record Date within 5 Business Days of the Record Date;

(b)subject to receipt by Panbio or its agent of the Scheme Consideration in accordance with the terms of this Scheme, each Scheme Participant will be bound to transfer that Scheme Participant’s Scheme Shares to Inverness Australia; and

(c)on the transfer of all of the Scheme Shares to Inverness Australia, Panbio will become a wholly owned subsidiary of Inverness Australia.

1.7Inverness has entered into the Deed Poll pursuant to which it has, among other things, covenanted to carry out its obligations as contemplated by this Scheme.  Inverness and Panbio have also entered into the Implementation Agreement, which sets out the terms on which Panbio and Inverness have agreed to implement this Scheme.

2Conditions precedent to and effectiveness of the Scheme

2.1The conditions precedent to this Scheme are:

(a)No Termination of the Implementation Agreement or Deed Poll: Neither the Implementation Agreement nor Deed Poll being terminated prior to 8:00 am on the Second Court Date.

(b)Conditions Precedent under Implementation Agreement: The conditions set out in clause 3.1 of the Implementation Agreement having been satisfied or waived in accordance with the terms of the Implementation Agreement by the time indicated in the Implementation Agreement.

(c)Scheme Approval: This Scheme being agreed to in accordance with section 411 of the Corporations Act at the Scheme Meeting.

(d)Court approval: The approval by the Court of this Scheme being given at the Second Court Hearing provided that, should the Court propose to approve this Scheme subject to any conditions or alterations to this Scheme or the Scheme Booklet, Panbio may on behalf of all parties concerned, by its counsel, consent to only such of those alterations or conditions to this Scheme or the Scheme Booklet to which Inverness or Inverness Australia has consented.

2.2The conditions precedent in clause 2.1 are for the benefit of both Panbio and Inverness. Panbio and Inverness have the benefit of the conditions precedent in the Implementation Agreement as set out in the Implementation Agreement.

2.3Panbio and Inverness may waive in their sole and absolute discretion any breach or non-fulfilment of any condition precedent of which they have the benefit under clause 2.2 in accordance with the Implementation Agreement.

2.4The satisfaction or waiver of each paragraph of clause 2.1 is a condition precedent to the operation of the provisions of clause 3.

2.5Panbio and Inverness will each provide to the Court at the Second Court Hearing a certificate confirming whether or not all the conditions in clause 3.1 of the Implementation Agreement have been satisfied or waived in accordance with the terms of the Implementation Agreement and whether or not the conditions precedent to this Scheme (other than Court approval under clause 2.l(d)) have been satisfied or waived in accordance with the terms of this Scheme.

2.6This Scheme will lapse and be of no further force or effect if:

(a)the Effective Date has not occurred on or before the End Date; or

(b)the Implementation Agreement is terminated on or before the date upon which Inverness pays, or causes its nominee to make payment of, the Scheme Consideration to Panbio (or its payment agent),

in which case Panbio and Inverness will be released from any:

(c)further obligation to take steps to implement the Scheme; and

(d)any liability with respect to the Scheme.

3The Scheme

3.1Panbio will lodge with the ASIC an office copy of the Court order made under section 411 of the Corporations Act approving this Scheme by 5.00 pm on the first Business Day after the day on which the Court approves this Scheme. This Scheme becomes binding on Panbio and each Scheme Participant upon lodgement with the ASIC of an office copy of the Court order made under section 411 of the Corporations Act approving the Scheme.

3.2With effect from the Effective Date:

(a)in consideration for the transfer of the Scheme Shares to Inverness Australia, Inverness will pay, or cause its nominee to make payment of, the Scheme Consideration to each Scheme Participant in respect of each Scheme Share registered in the name of that Scheme Participant in the Register as at the Record Date in accordance with the provisions of this Scheme; and

(b)on receipt by Panbio or its agent of the Scheme Consideration in accordance with clause 3.3, the Scheme Shares together with all rights and entitlements attaching to the Scheme Shares as at the Effective Date will be beneficially transferred to Inverness Australia and the transfer will be completed by Panbio delivering to Inverness Australia duly completed and executed share transfer forms (or a master share transfer form) to transfer all of the Scheme Shares to Inverness Australia by the Implementation Date, without the need for any further act by any Scheme Participant.

3.3Inverness' obligation to pay, or cause its nominee to make payment of, the Scheme Consideration will be satisfied by Inverness or its nominee procuring payment to Panbio (or a payment agent acting for Panbio) on behalf of each Scheme Participant, within 2 Business Days of the Record Date, a bank cheque drawn in Australian currency or other means agreed between Inverness and Panbio the aggregate Scheme Consideration payable to the Scheme Participants.  Panbio must deposit, or procure its payment agent to deposit, the Scheme Consideration in cleared funds into an Australian dollar denominated trust account, operated by Panbio or its payment agent as trustee for the Scheme Participants, to be held in trust for those Scheme Participants (except that any interest on the amount deposited, less bank fees and other charges, shall be to Inverness’ account), which Scheme Consideration must be paid in accordance with clauses 3.4 to 3.6.

3.4The obligations to pay the Scheme Consideration will be satisfied by Panbio or a payment agent acting for Panbio, within 5 Business Days of the Record Date either:

(a)sending to each Scheme Participant a cheque drawn in Australian currency in the amount of; or

(b)where the Scheme Participant has nominated (by written notice to Panbio on or before the Record Date) a bank account with an Australian financial institution for the purpose of payment of the Scheme Consideration, then by depositing directly to that bank account, the amount of,

the Scheme Consideration multiplied by the number of Scheme Shares registered in the name of the Scheme Participant in the Register.

3.5In the case of joint holders of Scheme Shares (if any) who have not nominated by written notice to Panbio a bank account for direct crediting of the Scheme Consideration, cheques will be drawn payable to the joint holders and be forwarded to the holder whose name appears first in the Register on the Record Date.

3.6Despatch to a Scheme Participant of any cheque for the Scheme Consideration, must be by pre-paid ordinary post (or, if the address of the Scheme Participant in the Register is outside Australia, by pre-paid airmail post) in an envelope addressed to the address shown in the Register on the Record Date.

3.7Inverness will procure that Inverness Australia executes the share transfer forms (or a master share transfer form) referred to in clause 3.2(b), and will deliver the duly stamped share transfer forms (or a master share transfer form) to Panbio for registration.

3.8Subject to receipt by Panbio or its agent of the Scheme Consideration in accordance with the terms of this Scheme, immediately following receipt of the transfer forms in respect of the Scheme Shares, Panbio must enter the name of Inverness Australia in the Register in respect of the Scheme Shares.

3.9Panbio and Inverness have agreed by executing the Implementation Agreement to implement the terms of this Scheme and the steps contemplated to follow the implementation of this Scheme, insofar as the same are required to be implemented by each of them.

4Dealings in Shares

4.1For the purpose of establishing who are the Shareholders as at the Record Date, dealings in Shares will only be recognised if:

(a)in the case of dealings of the type to be effected using CHESS, the dealing is effected on or before Close of Trading and the transferee is registered in the Register as the holder of the relevant Shares by the Record Date; and

(b)in all other cases, if registrable transmission applications or transfers in respect of dealings effected on or before Close of Trading are received on or before the Record Date at the place where the Register is kept.

4.2Panbio must register registrable transmission applications or transfers of the kind referred to in clause 4.1(b) by the Record Date.

4.3No Shareholder shall dispose of or purport or agree to dispose of any Shares or any interest therein after Close of Trading.  Any dealings in Shares after Close of Trading shall not be recognized by the Registrar.

4.4Panbio will not accept for registration or recognise for any purpose any transmission application or transfer in respect of Shares received after the Record Date, other than a transfer to Inverness Australia in accordance with this Scheme.

4.5For the purpose of determining entitlements to the Scheme Consideration, Panbio will, until payment of the Scheme Consideration has been made, maintain the Register in accordance with the provisions of this clause 4 and the Register in this form will solely determine entitlements to the Scheme Consideration.

4.6All statements of holding for Scheme Shares will cease to have any effect from the Record Date as documents of title in respect of such shares. As from the Record Date, each entry current at that date on the Register relating to Scheme Shares, will cease to be of any effect other than as evidence of entitlement to the Scheme Consideration and other interests pursuant to this Scheme in respect of the Scheme Shares relating to that entry.

4.7Panbio must procure that by 9.00 am on the Implementation Date, details of the names, registered addresses and holdings of Shares of every Scheme Participant as shown in the Register as at the Record Date are available to Inverness Australia in such form as Inverness Australia may reasonably require.

5Covenants and warranties by Scheme Participants

5.1Each Scheme Participant:

(a)agrees to the transfer of their Scheme Shares to Inverness Australia, in accordance with the Scheme;

(b)consents to Panbio doing all things necessary or desirable to give full effect to the Scheme and the transactions contemplated by it; and

(c)without the need for any further act, irrevocably appoints Panbio and each of the directors and officers of Panbio, jointly and severally, as the Scheme Participant’s attorney and agent for the purpose of executing any document or doing any other act necessary to give effect to the Scheme and the transactions contemplated by it including, without limitation, the provision of a proper instrument of transfer of the Scheme Participant’s Scheme Shares for the purposes of section 1071B of the Corporations Act (which may be a master transfer of all or part of the Scheme Shares).

5.2Each Scheme Participant is deemed to have warranted to Inverness Australia that:

(a)all the Scheme Shares owned by that Scheme Participant (including any rights and entitlements attaching to those Scheme Shares) transferred to Inverness Australia under the Scheme will, on the Implementation Date, be fully paid and free from all mortgages, charges, liens, encumbrances, pledges, security interests and other interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind, whether legal or otherwise; and

(b)they have full power and authority to sell and to transfer their Shares (including any rights and entitlements attaching to those Shares) to Inverness Australia under the Scheme.

6Quotation of Shares

6.1Panbio will apply to ASX for suspension of trading on ASX after Close of Trading.  It is expected that suspension of trading on ASX in Shares will occur from the commencement of the Business Day following the day on which Panbio notifies ASX of the approval of the Scheme by the Court.

6.2Subject to the share transfer forms (or a master share transfer form) having been executed in accordance with clause 3.7, Panbio will, on a date determined by Inverness, apply for termination of the official quotation of Shares on ASX.

7General

7.1Should the Court propose to approve this Scheme subject to any alterations or conditions, Panbio may by its counsel consent on behalf of all persons concerned to those alterations or conditions to which Inverness or Inverness Australia has consented.

7.2Panbio will pay the costs of the Scheme, except that Inverness will pay any stamp duty payable on the transfer by Scheme Participants of the Scheme Shares to Inverness Australia.

7.3Panbio will do all things and execute all deeds, instruments, transfers and other documents as may be necessary or desirable to give full effect to the Scheme and the transactions contemplated by it.

7.4The proper law of this Scheme is the law of the State of Queensland.

8Notices

8.1Form

Any notice, transfer, transmission application, direction or other communication referred to in the Scheme given or made to Panbio under this document must be in writing in English and signed by the sender or a person duly authorised by the sender.

8.2When effective

Communications take effect from the time they are received unless a later time is specified.

8.3Receipt – post

If communications are sent by post, they are taken to be received three days after posting (or seven days after posting if sent to or from a place outside Australia).

8.4Receipt – fax

If communications are sent by fax, they are taken to be received at the time shown in the transmission report as the time that the whole fax was sent.

8.5Receipt – general

Despite clauses 7.3 and 7.4, if they are received after 5.00 pm in the place of receipt or on a non-Business Day, they are to be taken to be received at 9.00 am on the next Business Day.

9Definitions and interpretation

9.1Definitions

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited.

Business Day has the meaning given in the official Listing Rules of the Australian Securities Exchange.

CHESS means the clearing house electronic sub-register system for the transfer and registration of securities as operated by ASX Settlement and Transfer Corporation Limited.

Close of Trading means close of trading on ASX on the Effective Date.

Corporations Act means the Corporations Act 2001 (Cwlth).

Court means a court of competent jurisdiction under the Corporations Act.

Deed Poll means the deed poll dated on or about 31 October 2007 executed by Inverness whereby, among other things, Inverness covenants to carry out its obligations under this Scheme.

Effective when used in relation to the Scheme, means the coming into effect, pursuant to section 411(10) of the Corporations Act, of the order of the Court made under sections 411(4)(b) in relation to the Scheme.

Effective Date means the date on which the Scheme becomes Effective.

End Date has the meaning given to it in the Implementation Agreement.

Excluded Share means a Share held by Inverness or by any person on behalf of or for the benefit of Inverness.

Inverness means Inverness Medical Innovations, Inc.

Inverness Australia means Inverness Australia Pty Limited (ACN 128 023 058).

Implementation Agreement means the scheme implementation agreement dated 7 October 2007 between Panbio and Inverness relating to the implementation of the Scheme, as amended and restated by a deed dated on or about 31 October 2007.

Implementation Date means the later of:

the second Business Day after the Record Date; and

the Business Day after payment of the Scheme Consideration by Inverness in accordance with clause 3.3 of this Scheme.

Panbio means Panbio Limited (ABN 19 010 728 220).

Record Date means 7:00 pm on the fifth Business Day following the Effective Date or such other date agreed with ASX to be the record date to determine entitlements to receive Scheme Consideration pursuant to the Scheme.

Register means the register of Panbio’s shareholders maintained by Panbio in accordance with the Corporations Act.

Registrar means the company engaged by Panbio to maintain the Register, being Computershare Investor Services Pty Limited.

Scheme means this scheme of arrangement subject to any alterations or conditions made or required by the Court pursuant to section 411(6) of the Corporations Act and agreed or consented to by Panbio and Inverness.

Scheme Booklet has the meaning given to it in the Implementation Agreement.

Scheme Consideration means $0.65 in respect of each Scheme Share held by the Scheme Participants as at the Record Date or such other amount as agreed by the parties.

Scheme Meeting means the meeting of Scheme Participants ordered by the Court to be convened pursuant to section 411(1) of the Corporations Act to consider and, if thought fit, to agree to the Scheme.

Scheme Share means a Share held by a Scheme Participant as at the Record Date other than an Excluded Share.

Scheme Participant means each person who is registered in the Register as the holder of a Scheme Share as at the Record Date.

Second Court Date means the first day of hearing of an application made to the Court for an order pursuant to section 411(4)(b) of the Corporations Act approving the Scheme.

Second Court Hearing means the hearing of the application made to the Court for an order pursuant to section 411(4)(b) of the Corporations Act approving the Scheme.

Share means a fully paid ordinary share in Panbio.

Shareholder means each person who is registered in the Register from time to time as the holder of a Share.

9.2Interpretation

In this Scheme, unless the context otherwise requires:

(a)headings are for convenience and do not affect interpretation;

(b)the singular includes the plural and vice versa;

(c)each gender includes every other gender;

(d)the word “person” includes a body corporate, a partnership, a joint venture, an unincorporated body or association, or any government agency;

(e)a reference to a person includes a reference to the person's executors, administrators, successors, substitutes and assigns;

(f)words and phrases have the same meaning (if any) given to them in the Corporations Act;

(g)references to any legislation or regulations include any statutory modification of or substitution for such legislation or regulations;

(h)references to agreements or deeds are to agreements or deeds as amended from time to time;

(i)a reference to a clause, party, annexure, exhibit or schedule is a reference to a clause of, and a party, annexure, exhibit and schedule to this Scheme and a reference to this Scheme includes any annexure, exhibit and schedule;

(j)a reference to a holder includes a joint holder;

(k)references to a currency are to Australian currency; and

(l)a reference to time is a reference to the time in Brisbane, Queensland.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD2165 OF 2007

IN THE MATTER OF PANBIO LIMITED (ABN 19 010 728 220)

PANBIO LIMITED (ABN 19 010 728 220) Plaintiff
JUDGE:	EMMETT J
DATE:	20 DECEMBER 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 6 November 2007, the Court made orders for the convening of a meeting of the members of the plaintiff, Panbio Limited (the Company), for the purpose of considering a proposed scheme of arrangement between the Company and its shareholders. 

2. The meeting ordered to be convened was duly convened and held on 17 December 2007, when the shareholders of the Company overwhelmingly agreed to the scheme. A total of 45,227,294 votes were cast. Of those, 45,040,262 votes, representing 99.59% of the votes cast and representing 457 shareholders, being 95.41% of shareholders, were in favour of the motion. The majority referred to in s 411 of the Corporations Act 2001 (Cth) (the Act) may therefore be taken to have approved the scheme and to have voted in favour of it.

3. I am satisfied, from the affidavits of Peter Burrows affirmed 17 December 2007 and 19 December 2007, John Thomas Fisher-Stamp affirmed 17 December 2007, Rachael Sakurai sworn 19 December 2007, Stephen Pickering affirmed 19 December 2007, Graham John Liddle affirmed 19 December 2007 and Stephanie Jane Daveson affirmed 20 December 2007, that the meeting was convened and held in accordance with the orders made by the Court on 6 and 14 November 2007. 

4. On 19 December 2007, Australian Securities and Investments Commission (the Commission) wrote to the Company’s solicitors stating that the Commission has no objection to the Scheme of Arrangement on the basis that the Commission is satisfied that the Scheme has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6 of the Act. Accordingly, there is no prohibition in s 411(17) against the Court approving the proposed Scheme of Arrangement.

5. The Scheme is conditional upon certain events.  I have seen certificates signed on behalf of the Company and the proposed transferee, to the effect that all of the conditions precedent, set out in clauses 2.1 of the scheme and 3.1 of the Scheme Implementation Agreement, other than the condition that the Court approve the Scheme, have been satisfied. 

6. In my reasons for ordering that the meeting be convened, I referred to the Deed Poll that has been executed in order to ensure that there is no performance risk under the Scheme in relation to the transfer of beneficial ownership prior to the payment of the scheme consideration.

7. When the matter was called on for hearing, there was no appearance except on behalf of the Company and the transferee.  The Company’s solicitors have received no notification pursuant to the advertisement of this hearing that any person wishes to appear to oppose the scheme. 

8. In the circumstances, I consider that it is appropriate to make an order approving the Scheme. It is also appropriate to exempt the Company from complying with s 411(11) of the Act.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:       11 January 2008

Counsel for the Plaintiff:	Mr R Dick
Solicitor for the Plaintiff:	Corrs Chambers Westgarth
Counsel for Inverness Medical Innovation Inc and Inverness Australia Pty Limited:	Mr IM Jackman SC
Solicitor for Inverness Medical Innovation Inc and Inverness Australia Pty Limited:	Mallesons Stephen Jaques
Date of Hearing:	20 December 2007
Date of Judgment:	20 December 2007