Think Childcare Limited, in the matter of Think Childcare Limited

Think Childcare Limited, along with two other entities, applied to the Federal Court of Australia under section 411(1) of the Corporations Act 2001 (Cth) for orders convening meetings of their respective shareholders to consider and, if thought fit, approve a scheme of arrangement. The scheme involves the acquisition of the plaintiffs by an entity controlled by Mathew Graeme Edwards. The Australian Securities and Investments Commission (ASIC) was given notice of the application hearing. The court had to determine whether the terms of the scheme were fair or, if not fair, whether they were reasonable. The plaintiffs argued that the scheme terms were fair. However, the court found that the scheme terms were not fair but were reasonable. The court considered the statutory presumption under section 411(4) of the Act that the scheme was fair and whether this presumption was rebutted. The court concluded that the statutory presumption was rebutted because the scheme terms did not adequately address the interests of minority shareholders.

The court held that the scheme terms were not fair because they did not adequately address the interests of the minority shareholders. The court noted that the scheme terms provided for a cash payment to the shareholders of the plaintiffs, but this payment was based on a valuation of the plaintiffs that was not independently verified. The court also noted that the scheme terms did not provide for a dissenting shareholder’s right to object to the scheme and to be paid the fair value of their shares. However, the court held that the scheme terms were reasonable because they provided for a cash payment to the shareholders of the plaintiffs, and the payment was not manifestly disadvantageous to the minority shareholders. The court also noted that the scheme terms provided for the appointment of an independent expert to determine the value of the plaintiffs, which would provide some protection to the minority shareholders.

The court made orders convening meetings of the shareholders of the plaintiffs to consider and, if thought fit, approve the scheme. The meetings were to be held electronically, without any physical meeting of the shareholders. The court also made orders regarding the convening of the meetings, the conduct of the meetings, and the voting on the resolutions to approve the scheme. The court adjourned the further hearing of the plaintiffs’ application for approval of the scheme to a later date.