Re Nexus Energy Ltd

In the Federal Court of Australia, Nexus Energy Limited sought orders under section 1319 of the Corporations Act 2001 (Cth) for additional disclosures to be made to its shareholders regarding the intentions of Seven Group Holdings Limited (SGH) not to increase the scheme consideration. This request was made in the context of a proposed scheme of arrangement between Nexus and its shareholders. The central issue before the Court was whether the Court should approve and order the distribution of supplementary disclosure material to Nexus shareholders, given that SGH had announced it would not increase the offer price.

The Court considered the authority under section 1319 of the Corporations Act, which allows the Court to give directions concerning the convening, holding, and conduct of meetings ordered by the Court, including the authorisation of additional disclosures. The Court noted the importance of the Australian Securities and Investments Commission's (ASIC) request that Nexus bring to the attention of its shareholders SGH's announcement that it would not increase the scheme consideration, as per the ASIC "truth in takeovers" policy. The Court also reviewed the affidavits submitted by representatives of Nexus and ASIC, which detailed the relevant background and the proposed supplementary disclosure. Justice Gilmour concluded that the supplementary disclosure should be approved for distribution to the shareholders. This was deemed necessary to ensure that shareholders were fully informed of SGH's intentions and the implications thereof.

The Court ordered that the supplementary disclosure, referred to as "LDM2," be distributed to Nexus shareholders by ordinary pre-paid post or through the nominated notification means. The dispatch was to be completed by 29 May 2014, ensuring that it would be sufficient notice for the meeting convened by the Court on 12 June 2014. Furthermore, Nexus was directed to lodge an office copy of these orders with ASIC as soon as practicable after the orders were made.