Re Lion Nathan Ltd (No 2)

Case [2009] FCA 1261

FEDERAL COURT OF AUSTRALIA

Lion Nathan Limited, in the matter of Lion Nathan Limited (No. 2)
[2009] FCA 1261 

Corporations Act 2001 (Cth) s 411
Federal Court (Corporations) Rules 2000

LION NATHAN LIMITED, IN THE MATTER OF LION NATHAN LIMITED
(ACN 093 160 448)

NSD 790 of 2009

EMMETT J
7 OCTOBER 2009
CANBERRA


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 790 of 2009

IN THE MATTER OF LION NATHAN LIMITED

LION NATHAN LIMITED (ACN 093 160 448)
Plaintiff

JUDGE:

EMMETT J

DATE OF ORDER:

7 OCTOBER 2009

WHERE MADE:

CANBERRA

THE COURT ORDERS THAT:

1.Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (the “Act”), the scheme of arrangement between the plaintiff and its Non-Kirin Shareholders (as defined in the Orders made on 5 August 2009) which is annexed hereto and marked “A” be and is hereby approved.

2.Pursuant to s 411(12) of the Act, the plaintiff be exempt from compliance with s 411(11) of the Act in respect of the scheme of arrangement referred to in Order 1 above.

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


The text of entered orders can be located using eSearch on the Court’s website.

SCHEME OF ARRANGEMENT

DATED 7 OCTOBER 2009

Lion Nathan Limited (ACN 093 160 448) (“Lion Nathan”)

Scheme Participants

CONTENTS

Details  51
General Terms  52

1       Definitions and interpretation  52

2       Preliminary  53

3       Conditions precedent  53

4       Scheme  54

5       Implementation of Scheme  54

6       Provision of Scheme Consideration  54

7       Dealings in Lion Nathan Shares  55

8       General provisions  55

9       Governing law and jurisdiction  56

DETAILS

Parties  Lion Nathan and Scheme Participants

Lion Nathan           Name                  Lion Nathan Limited
  ACN                   093 160 448

Address               Level 7, 68 York Street

Sydney, NSW, 2000, Australia
  Telephone            61-2-9320-2200
  Fax  61-2-9320-2264

Attention              General Counsel and Company Secretary

Scheme                   Name                  Lion Nathan Shareholders as at the Scheme

Participants  Record Date, other than an Excluded

Shareholder.

Governing law        New South Wales

General terms

1.1     DEFINITIONS AND INTERPRETATION

1.1      Definitions

In this Scheme, unless the context requires otherwise:

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited (ABN 98 008 624 691), Australian Securities Exchange or the Australian Stock Exchange as appropriate.

Business Day means a business day as defined in the Listing Rules.

CHESS means the clearing house electronic sub-register system for the electronic transfer of securities operated by ASX Settlement and Transfer Corporation Pty Limited (ABN 49 008 504 532).

Corporations Act means the Corporations Act 2001 (Cwlth).

Court means the Federal Court of Australia (New South Wales registry), or such other court of competent jurisdiction under the Corporations Act agreed in writing by Lion Nathan and Kirin.

Deed Poll means the deed poll executed by Kirin substantially in the form of Annexure B of the Implementation Agreement or as otherwise agreed by Kirin and Lion Nathan under which Kirin covenants in favour of each Scheme Participant to perform its obligations under…

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Details
AGLC
Re Lion Nathan Ltd (No 2) [2009] FCA 1261
Case
[2009] FCA 1261
Decision Date

CaseChat Overview and Summary

The case of Re Lion Nathan Ltd (No 2) involved the applicant, Lion Nathan, seeking approval for a scheme of arrangement under the Corporations Act 2001 (Cth). The scheme related to an acquisition proposal by Kirin Holdings. The primary legal issue before the court was whether the scheme of arrangement was appropriately convened and whether it should be approved. This involved verifying the proper dispatch of the scheme booklet to shareholders and whether the meeting was conducted in accordance with the court's previous orders. Additionally, the court needed to assess if the consideration offered in the scheme was fair and whether the Australian Securities and Investments Commission had any objections to the scheme.

The court found that the scheme booklet was duly despatched or made available to relevant shareholders, as evidenced by the affidavits of Mr Duncan Harold Makeig, Ms Rosalind Kate Hills, and Ms Helen Lorraine Potbury. The Australian Securities and Investments Commission had also provided a letter stating it had no objections to the scheme. Furthermore, the independent report by Messrs Craig Edwards and Phillip Holt valued a 100% interest in Lion Nathan between $10.95 per share and $12.21 per share, with the scheme offering $12 per share, representing a substantial premium over the pre-proposal trading price. The court was satisfied that the scheme had been appropriately conducted and that the consideration offered was fair.

In light of these findings, the court approved the scheme of arrangement and exempted Lion Nathan from compliance with certain provisions of the Corporations Act. The scheme was deemed to be in the best interests of the company and its shareholders.

Orders

Orders of the court

1. Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (the “Act”), the scheme of arrangement between the plaintiff and its Non-Kirin Shareholders (as defined in the Orders made on 5 August 2009) which is annexed hereto and marked “A” be and is hereby approved.

2. Pursuant to s 411(12) of the Act, the plaintiff be exempt from compliance with s 411(11) of the Act in respect of the scheme of arrangement referred to in Order 1 above.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

EMMETT J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: EMMETT J

The meeting that Lion Nathan was ordered to convene was duly convened and held on 17 September 2009. Lion Nathan now applies to the Court for approval of the scheme pursuant to s 411 of the Corporations Act 2001 (Cth) (the Corporations Act). Lion Nathan relies upon material that was before the Court at the first hearing. That material related to the factual information in the scheme booklet, as described in my earlier reasons, and the report of Mr Craig Edwards and Mr Phillip Holt concerning the appropriateness of the consideration for the proposed acquisition. I am satisfied from the affidavits of Mr Duncan Harold Makeig, sworn 1 October 2009 and Ms Rosalind Kate Hills, sworn 2 October 2009 that the scheme booklet was despatched or made available to relevant shareholders in accordance with the orders made by the Court as subsequently varied. The scheme booklet was lodged with the Australian Securities and Investments Commission (the Commission) following the first court hearing and, by letter of 6 October 2009, the Commission informed the solicitors for Lion Nathan, pursuant to s 411(17)(b) of the Corporations Act, that the Commission has no objection to the scheme of arrangement. The letter indicates that that statement has been given by the Commission having regard to its criteria for providing such a statement as set out in Regulatory Guide 60 and Regulatory Guide 142. The affidavit of Mr Nicholas Aleksander Vesic of 2 October 2009 indicates that the scheme booklet as posted corresponds with the document that was in evidence on the first occasion, subject to several minor inconsequential changes. The affidavits of Mr Makeig of 1 October 2009 and Ms Hills of 2 October 2009 and Ms Helen Lorraine Potbury of 2 October 2009 indicate that proxies were received and appropriately dealt with in respect of the meeting on 17 September 2009. Mr Geoffrey Ricketts, Lion Nathan’s chairman of directors, chaired the meeting of shareholders pursuant to the order made on 5 August 2009. Mr Ricketts addressed the meeting and indicated reasons why shareholders should vote in favour of the proposal and also advanced arguments that might have been put against the proposal. Shareholders present at the meeting were invited to put questions. In response, a shareholder observed that the world had changed since the offer was first made and that the market had moved up a long way since then. Mr Ricketts indicated that the market price of shares in Lion Nathan had not dropped to the same extent as the rest of the market and that any deterioration was immaterial. In any event, Mr Ricketts pointed out, the independent report by Messrs Edwards and Holt had valued a 100% interest in Lion Nathan at between $10.95 per share and $12.21 per share. The value of the cash payments under the scheme was above the mid-point of that range of $11.58 per share. Further, the cash payments of $12 per share represented a substantial premium on the pre-proposal trading price of shares in Lion Nathan. In fact, it represented a 54% premium over the volume weighted average price of Lion Nathan shares over the one month prior to 22 April 2009, when the proposal was announced. Indeed, the offer is higher than the all-time high share price of Lion Nathan shares prior to the receipt of the proposal from Kirin Holdings of $9.85 per share. In the circumstances, I am persuaded that there is no concern to be expressed in relation to the matter raised by the shareholder at the meeting.