JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: AZURE MINERALS LIMITED [2024] WASC 58
CORAM: LUNDBERG J
HEARD: 1 MARCH 2024
DELIVERED : 6 MARCH 2024
FILE NO/S: COR 192 of 2023
BETWEEN: AZURE MINERALS LIMITED
Plaintiff
S H MINING PTY LTD
Interested Party
Catchwords:
Corporations Law - Scheme of arrangement under s 411 of the Corporations Act 2001 (Cth) - Plaintiff lithium mining company to be wholly acquired by vehicle jointly owned by two large mining groups - Scheme forms part of a dual scheme and takeover process - First court hearing - Voting intention statements received from the plaintiff's major shareholders in favour of proposed Scheme - Independent expert of the opinion that proposed scheme is fair and reasonable and in the best interests of the shareholders - Whether appropriate for orders to be made convening scheme meeting and for dispatch of scheme booklet - Turns on own facts
Legislation:
ASIC Regulatory Guide 111
Corporations Act 2001 (Cth), s 411 and s 1319
Corporations Regulations 2001 (Cth), sch 8
Supreme Court (Corporations) (WA) Rules 2004, r 3.2
Takeovers Panel Guidance Note 23: Shareholder Intention Statements
Result:
Orders made in terms of plaintiff's minute of proposed orders dated 1 March 2024 to convene scheme meeting and authorise dispatch of scheme booklet
Category: B
Representation:
Counsel:
| Plaintiff | : | A J Papamatheos and K A Sleiman |
| Interested Party | : | S K Dharmananda SC |
Solicitors:
| Plaintiff | : | Corrs Chambers Westgarth |
| Interested Party | : | King & Wood Mallesons and Herbert Smith Freehills |
Case(s) referred to in decision(s):
FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69
Re Anatolia Energy Limited [2015] FCA 1134
Re Foundation Healthcare Ltd [2002] FCA 742; (2002) 42 ACSR 252
Re Healthscope Ltd [2019] FCA 542; (2019) 139 ACSR 608
Re Huon Aquaculture Group Limited [2021] FCA 1170
Re Nitro Software Limited [2023] NSWSC 13
Re NRMA Insurance Ltd (No 1) [2000] NSWSC 82; (2000) 156 FLR 349
Re Programmed Maintenance Services Ltd [2017] FCA 1265
Re SRG Ltd [2018] FCA 1092
Re Village Roadshow Limited (No 2) [2020] FCA 1857
Re Virtus Health Ltd [2022] NSWSC 597
Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [2018] WASC 308
Re Zenith Energy Ltd [2020] WASC 266
Technology Metals Australia Limited v Australian Vanadium Limited [2024] WASC 26
Table of Contents
A. Introduction and overview
B. Framework of the Scheme
C. Materials relied upon by the plaintiff
D. Legislative Framework
E. Issues for determination
F. Statutory and procedural requirements
Statutory requirements
ASIC's reasonable opportunity
Adequacy of the Transaction Booklet
Procedural requirements
G. Court's discretion
Dual scheme and takeover process
Independent expert's opinion
Director's interests and recommendations
Shareholder voting intention statements
Shareholder communications
Performance risk
Common scheme features
H. Conclusion and orders
ATTACHMENT A Orders made on 1 March 2024
LUNDBERG J:
A. Introduction and overview
The plaintiff to this proceeding, Azure Minerals Limited (Azure), is an ASX listed entity which controls various mineral projects…
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- AGLC
- Re Azure Minerals Limited [2024] WASC 58
- Case
- [2024] WASC 58
- Decision Date
CaseChat Overview and Summary
The court considered the legal requirements for convening a scheme meeting under s 411 of the Corporations Act, as well as the evidence provided by the plaintiff's major shareholders and the independent expert. The court was satisfied that the plaintiff had demonstrated a sufficient level of support from its major shareholders, which was a crucial factor in determining whether the scheme was likely to succeed. Additionally, the independent expert's report, which was based on a detailed analysis of the transaction and the scheme, provided a strong basis for the court to conclude that the scheme was fair and reasonable. The court found that the evidence presented was sufficient to warrant the convening of a scheme meeting and the dispatch of the scheme booklet.
The Federal Court of Australia made orders convening a scheme meeting and for the dispatch of the scheme booklet. The court determined that the plaintiff had met the necessary threshold for convening a scheme meeting, given the level of support from its major shareholders and the independent expert's opinion. The court also noted that the scheme meeting and the general meeting would be held on the same day, with the general meeting taking place immediately prior to the scheme meeting. The orders allowed the scheme process to proceed, providing the plaintiff and the acquiring parties an opportunity to seek shareholder approval for the proposed acquisition.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
The consideration for the acquisition (the Scheme Consideration) is $3.70 cash for each Share. Accordingly, for an overall transaction price of around $1.061 billion in cash, SH Mining would wholly acquire the plaintiff. The cash consideration under the off-market takeover transaction is slightly less, at $3.65 per share. The principal transaction instruments to which my attention has been drawn consist of the TID,[8] the Scheme Deed Poll,[9] the Joint Bidding Deed,[10] and the Scheme itself.[11][8] Second Sleiman Affidavit, pages 12 – 137. This is the instrument which replaced the initial transaction instrument.[9] Second Sleiman Affidavit, pages 123 – 134; Third Sleiman Affidavit, pages 394 – 395 (execution pages).[10] Dickson Affidavit, page 309.[11] Third Sleiman Affidavit, pages 377 – 393. By cll 5.2, 6.1, 9.3, 9.5, 9.6, and 10.2 of the Scheme, if it is made effective, all the ordinary shares in Azure (other than the defined Excluded Shares) will be transferred to SH Mining for the Scheme Consideration, irrespective of whether a Scheme Shareholder did not attend the Scheme Meeting, did not vote at that meeting, or voted against the Scheme at that meeting. By cl 3.1 of the Scheme Deed Poll, SH Mining undertakes in favour of each Scheme Shareholder to pay the Scheme Consideration, and undertake all other actions attributed to it under the Scheme. Further by cl 3.2, each of SQM and Hancock provide a guarantee of SH Mining's obligations. As to the takeover offer which forms part of the dual transaction structure, counsel for the plaintiff noted that relief has been obtained from ASIC by SH Mining in relation to the requirement under s 631 to make an offer within two months of a proposal being made.[12] Counsel also noted that the plaintiff requires an approval from its shareholders under s 611 (item 7) which is a matter to be the subject of a separate general meeting which will be held on the same day as the Scheme Meeting. The general meeting will be held immediately prior to the Scheme Meeting.[13] For the purposes of the first hearing, the plaintiff relied on the following affidavits:(a)the affidavit of Katrina Anne Sleiman affirmed on 6 December 2023 (First Sleiman Affidavit);(b)the affidavit of Katrina Anne Sleiman affirmed 19 February 2024 (Second Sleiman Affidavit);(c)the affidavit of Brett Douglas Dickson affirmed 26 February 2024 (Dickson Affidavit);(d)the affidavit of Thomas David Gray sworn on 1 March 2024 (Gray Affidavit);(e)the affidavit of Simeon Giles Flanagan sworn on 29 February 2024 (Flanagan Affidavit); and(f)the affidavit of Katrina Anne Sleiman affirmed 1 March 2024 (Third Sleiman Affidavit). Ms Sleiman is a partner with the law firm which is on the record for the plaintiff (Corrs Chambers Westgarth). Mr Dickson is the Chief Financial Officer and Company Secretary of the plaintiff. Mr Gray is a partner of one of the law firms (Herbert Smith Freehills) jointly acting for the interested party. Mr Flanagan is a solicitor with the other law firm (King & Wood Mallesons) which jointly acts for the interested party.