Re Cellestis Limited (No. 3)

[2011] VSC 493

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

LIST E
No.  2346 of 2011

IN THE MATTER of CELLESTIS LIMITED (ACN 094 962 133)

CELLESTIS LIMITED (ACN 094 962 133) Plaintiff

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JUDGE:	Davies J
WHERE HELD:	Melbourne
DATE OF HEARING:	9 August 2011
DATE OF JUDGMENT:	9 August 2011 (delivered ex tempore, revised 23 August 2011)
CASE MAY BE CITED AS:	Re Cellestis Limited (No. 3)
MEDIUM NEUTRAL CITATION:	[2011] VSC 493

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CORPORATIONS – Schemes of arrangement – Approval of scheme – Discretion – Corporations Act 2001 (Cth) ss 411 (11), 411(12) and 411 (17).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M.N. Connock SC with Mr G.J. Ahern	Baker & McKenzie
For QIAGEN N.V. and QIAGEN Australia Holding Pty Ltd	Mr R.D. Strong	Freehills

HER HONOUR:

1. The applicant, Cellestis Limited (“Cellestis”), seeks an order approving the scheme of arrangement that was agreed to by its members at a meeting called for that purpose on 3 August 2011.  The scheme, if approved, will result in the acquisition for cash consideration of all the ordinary shares in Cellestis by QIAGEN Australia Holding Pty Ltd (“QIAGEN Australia”).

1. On 14 June 2011 I ordered that Cellestis convene a meeting of its shareholders on 20 July 2011 to consider, and if thought fit, to approve the proposed scheme.[1] On 11 July 2011 Cellestis announced to the Australian Stock Exchange that it had received an improved proposal from QIAGEN N.V., the parent company of QIAGEN Australia. On 15 July 2011 I ordered that the scheme meeting be adjourned to 3 August 2011 to enable shareholders to consider and vote on the new proposal. The scheme meeting was held on 3 August 2011. On 5 August 2011 Associate Justice Efthim made orders pursuant to r 16.6 of the Supreme Court (Corporations) Rules 2003 that the meeting was duly convened and held in accordance with the convening orders, and that the resolutions considered at the meeting were duly passed. On 29 July 2011 a notice advertising the second hearing was published in “The Australian” newspaper in accordance with the convening orders. No notice has been received by the solicitors for Cellestis from any person indicating an intention to appear to oppose the approval of the scheme. Cellestis has received a statement in writing from ASIC under s 411(17)(b) of the Corporations Act 2001 (Cth) (“the Act”) that it has no objection to the scheme. In evidence also is a letter from the Foreign Investment Review Board dated 27 July 2011 in which the Board advises that there are no objections to this proposal in terms of the government’s foreign investment policy.

   [1]Re Mitchell Communication Group [2010] VSC 423 (Unreported, Davies J, 17 September 2010); see also Re Healthscope Limited [2010] VSC 367 (Unreported, Davies J, 3 September 2010).

1. The implementation of the scheme is conditional upon a number of conditions precedent being satisfied or waived.  Those conditions include Court approval of the scheme.  Cellestis has provided certificates to the Court in accordance with cl 3.2(a) of the scheme confirming that each condition precedent, other than the Court’s approval, has been satisfied or waived. 

1. I note also that on 4 August 2011, Cellestis announced that it would be declaring a special dividend.  The amount of the cash consideration payable by QIAGEN Australia for the shares in Cellestis will be $3.80 per share, less the amount of the special dividend declared.  The dividend declared is a fully franked special dividend of six cents per share. 

1. The role of the Court in approving a scheme of arrangement is well settled.[2] It is supervisory in nature, requiring the Court to be satisfied that the requirements of s 411 of the Act have been met, that there is no oppression and that the arrangement is one that is capable of being accepted by shareholders looking to their own commercial advantage.

   [2]Re Healthscope Limited [2010] VSC 440 (Unreported, Davies J, 24 September 2010); Opes Prime  Stockbroking Ltd (No 2) (2009) 73 ACSR 411 [8]-[9] (Finklestein J).

1. I am satisfied that the order should be made for the reasons that:

(a)the order for approval of the scheme is not opposed by any shareholder or by ASIC;

(b)the scheme is supported by the shareholders. The requisite majority for the purposes of s 411(4)(a) of the Act was satisfied;

(c)the opinion of the independent expert is that the scheme is in the best interests of shareholders;

(d)the scheme has the unanimous recommendation of the board of directors of Cellestis;

(e)Cellestis has received a statement in writing from ASIC under s 411(17)(b) of the Act stating that ASIC has no objection to the scheme;

(f)the Foreign Investment Review Board has provided a statement in writing that it has no objection to the proposal;

(g)there is nothing to suggest that the shareholders voted other than in good faith;

(h)the conditions precedent to the merger have been satisfied;

(i)the Cellestis board has declared a fully franked special dividend of six cents; and

(j)no shareholder has appeared to oppose Court approval.

1. In light of these matters and having regard to the matters that I took into account in ordering the convening of the meeting, I am satisfied that it is appropriate to approve the scheme.

1. Cellestis also seeks an order under s 411(12) of the Act for exemption from compliance with s 411(11) of the Act. In my view such an order is also appropriate. There is no alteration to the Constitution and once the scheme is implemented Cellestis will become a wholly owned subsidiary of QIAGEN Australia. The scheme will then be of historical interest only.[3]

   [3]Re Lion Selection [2009] VSC 546 (Unreported, Judd J, 3 December 2009) [23] – [24]; Re Cytopia (No. 2) [2010] VSC 4 (Unreported, Croft J, 15 January 2010) [19] – [20]; Re GRD Limited [2009] FCA 1595 (Unreported, Gilmour J, 24 December 2009) [36] – [38].

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