Re Primac Holdings

In the Supreme Court of Queensland, the case of Re Primac Holdings dealt with a dispute regarding the adequacy of a Part A statement under the Corporations Law, specifically s.750, which governs takeover offers. The applicant, Primac Holdings Ltd, sought a declaration that the Part A statement, issued by IAMAQ pursuant to the Corporations Law, failed to disclose material information and sought injunctions to restrain its distribution and the making of offers based on it. The court was required to determine whether the Part A statement complied with s.750 and whether it adequately disclosed material information known to IAMAQ and not previously disclosed to Primac shareholders. The court examined the statutory obligations under s.750 and the implications of regulation 6.12.02, which prescribed additional disclosure obligations for offers involving listed shares.

The court found that the Part A statement did not adequately disclose material information concerning the relative values of the shares and their relative earning capacities, as well as the impact of the offer on IAMA. Specifically, the statement failed to disclose the basis for the IAMAQ directors' valuation of Primac shares, the reliability of the predicted earnings per IAMA share, and the factual basis for the directors' predictions regarding future profitability. The court held that these omissions constituted a failure to comply with both clauses 17 and 18 of Part A of s.750.

The court concluded that the breaches of s.750 effectively withheld relevant information from Primac shareholders, making it impossible for them to make an informed decision about the offer. Consequently, the court was satisfied that the breaches were of substance and warranted the declaration and restraining orders sought by Primac. The court further noted that it would hear further submissions on the form of order and costs.