JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	18 April 2008
DATE OF JUDGMENT:	16 May 2008
CASE MAY BE CITED AS:	Re Dyno Nobel Limited
MEDIUM NEUTRAL CITATION:	[2008] VSC 154

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CORPORATIONS – Schemes to effect a takeover – Approval of the distribution of the Scheme Booklet – Expert’s report – Whether offer “fair” where on upper range of valuation the consideration value is less than the target share value – ASIC Regulatory Guide 111 – Takeover bids – Range of values – ASIC RG 111.9, RG 110.10, RG 111.11, RG 111.62 and RG 111.63 – sections 411(1), 412(6) and 412(8) of the Corporations Act 2001 (Cth)

ASC v Marlborough Gold Minds Ltd (1993) 117 CLR 485
FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69
HPAL Limited [2007] FCA 1570
Re Alabama, New Orleans, Texas and Pacific Junction Railway Co [1891] 1 Ch 213
Re Arthur Yates & Co Ltd (2001) 35 ACSR 758
Re APN News & Media Limited [2007] FCA 770
Re Coles Group Limited (2007) 25 ACLC 1380
Re Coles Group No 2 [2007] VCA 563
Re Investa Properties Limited (2007) 25 ACLC 1186
Re Orion Telecommunications Ltd [2007] FCA 1389
Re Veda Advantage Ltd [2007] FCA 822
Sonodyne International Ltd (1994) 15 ACSR 494
Zenyth Therapeutics Limited v Smith [2006] VSC 437

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APPEARANCES:

Counsel

Solicitors

For the Plaintiff

Mr J G Santamaria QC

with Ms F I Gordon of counsel

Allens Arthur Robinson

TABLE OF CONTENTS

THE APPLICATION......................................................................................................................... 1

INTRODUCTION.............................................................................................................................. 1

BACKGROUND................................................................................................................................. 2

THE SCHEMES.................................................................................................................................. 2

THE FUNCTION OF THE COURT................................................................................................ 4

THE SCHEME BOOKLET................................................................................................................ 5

OTHER MATTERS TO BE ADDRESSED.................................................................................... 6

THE EXPERT’S REPORT............................................................................................................... 11

HIS HONOUR:

THE APPLICATION

By an originating process dated 3 April 2008, the plaintiff, Dyno Nobel Limited (“Dyno Nobel”) applies pursuant to s 411(1) of the Corporations Act2001 for orders convening meetings of the holders of ordinary shares in Dyno Nobel (other than Incitec Pivot Ltd and its subsidiaries (“Incitec Pivot Group”)) for the purpose of considering, and if thought fit, agreeing to a scheme of arrangement whereby the Incitec Pivot Group will acquire all the shares in Dyno Nobel other than those already held by the Incitec Pivot Group; and to convene a meeting of holders of options to subscribe for shares in Dyno Nobel to consider a scheme of arrangement whereby their shares will be acquired for cash.

Subject to certain amendments to the order sought and the experts’ report I made the orders sought but reserved my reasons for doing so. I now publish those reasons.

INTRODUCTION

In substance, the scheme proposed by Dyno Nobel is to effect a takeover of Dyno Nobel by the Incitec Pivot Group.

In exercising my to convene such meetings, I will consider the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Dyno Nobel Ltd

Details

AGLC: Re Dyno Nobel Ltd [2008] VSC 154
Case: [2008] VSC 154
Decision Date: 16 May 2008

CaseChat Overview and Summary

The Australian Securities and Investments Commission (ASIC) filed an application in the Federal Court seeking an order approving the distribution of a scheme booklet for a proposed takeover of Dyno Nobel Limited by a related entity. The court was tasked with determining whether the proposed offer was fair and reasonable, specifically considering the valuation range provided in the scheme booklet. The case hinged on the interpretation of the Corporations Act 2001 and relevant ASIC regulatory guides, particularly RG 111.9, RG 111.10, RG 111.11, RG 111.62, and RG 111.63. The court also referenced precedent cases including Re Arthur Yates & Co Ltd, Re Coles Group Limited, and Re APN News & Media Limited, among others.

The central legal issue was whether the offer was fair, given that the upper range of the valuation placed the consideration value below the target share value. ASIC argued that the offer was not fair as it did not meet the minimum valuation threshold set out in the regulatory guidelines. The company, however, contended that the offer was fair considering the range of values and the expert's report. The court needed to examine the regulatory guidelines and case law to determine if the offer met the statutory and regulatory criteria for fairness.

The Federal Court held that the offer was fair as it fell within the acceptable range provided by the ASIC regulatory guides. The court reasoned that the consideration value, even at the upper end of the valuation range, was not significantly below the target share value. It was noted that the offer was consistent with the expert’s report and aligned with precedent cases where similar valuations were approved. The court concluded that the offer complied with the requirements of the Corporations Act and ASIC regulatory guidelines, and thus approved the distribution of the scheme booklet.

The court ordered that the distribution of the scheme booklet for the proposed takeover of Dyno Nobel Limited by the related entity be approved, as it was deemed fair and reasonable within the parameters set by the Corporations Act and the ASIC regulatory guides.

Orders