Re Solution 6 Holdings Ltd

[2004] FCA 1049

FEDERAL COURT OF AUSTRALIA

Solution 6 Holdings Limited ACN 003 264 006, in the matter of Solution 6 Holdings Limited ACN 003 264 006 [2004] FCA 1049

CORPORATIONS – criteria for court’s approval of scheme of arrangement – scheme of arrangement fair and reasonable – whether share capital reduction precludes approval of scheme

Corporations Act 2001 (Cth), s411

Securities Act 1933 (United States and Federal), s3(a)

ReCentral Pacific Minerals NL [2002] FCA 239 followed
Re Permanent Trustee Co Limited (2002) 43 ACSR 601; [2002] NSWSC 1177 followed
Re Simeon Wines Limited (2002) 42 ACSR 454; [2002] SASC 204 followed

IN THE MATTER OF SOLUTION 6 HOLDINGS LIMITED ACN 003 264 006
N865 OF 2004

JACOBSON J
3 AUGUST 2004
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 865 of  2004

IN THE MATTER OF: SOLUTION 6 HOLDINGS LIMITED ACN 003 264 006
PLAINTIFF

JUDGE:	JACOBSON J
DATE OF ORDER:	2 AUGUST 2004
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Orders be made in accordance with the Short Minutes of Order dated 2 August 2004.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 865 of  2004

IN THE MATTER OF: SOLUTION 6 HOLDINGS LIMITED ACN 003 264 006
PLAINTIFF

JUDGE:	JACOBSON J
DATE:	3 AUGUST 2004
WHERE MADE:	SYDNEY

REASONS FOR JUDGMENT

1. By its originating process filed on 26 May 2004 the plaintiff, Solution 6 Holdings Limited ("Solution 6") sought, inter alia, an order under subsection 411(4) of the Corporations Act 2001(Cth) ("The Act") for the approval of three schemes of arrangement, namely schemes made between Solution 6 and its shareholders, its vested option holders and its unvested option holders.  I made an order yesterday approving the schemes.  These are my reasons.

2. The effect of the schemes, upon implementation, will be that all of the existing shares and options over shares in Solution 6 will be transferred to MYOB Limited ("MYOB") so that Solution 6 will become a wholly owned subsidiary of MYOB.  Thus, the schemes involves a merger of the businesses and operations of Solution 6 and MYOB.

3. Solution 6 is a leading provider of practice management software to the accounting and other professions.  The strength of its business lies in serving larger accounting practices.  MYOB also provides practice management software but the strength of its business is apparently in the areas of small to medium businesses and smaller accounting practices.  Accordingly, the rationale for the merger is to be found in the combination of the strengths of the respective complimentary businesses of Solution 6 and MYOB and the synergies which will flow from the merger.

4. The consideration for the share scheme is that Solution 6 shareholders are to transfer their shares in that company to MYOB in exchange for 0.55 MYOB shares for each Solution 6 share.

5. Shareholders in Solution 6 will also receive, as part of the scheme…