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Re Trade Me Group Ltd

Re Trade Me Group Ltd

Case [2019] NZHC 840 16 April 2019

Approval of Schemes of Arrangement

Shareholders' Rights

Fairness and Equity

Statutory Compliance

Corporate Law & Governance

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000279

[2019] NZHC 840

UNDER Part 19 of the High Court Rules

AND

IN THE MATTER OF

an application for orders approving a scheme of arrangement under Part 15 of the

Companies Act 1993

BETWEEN

TRADE ME GROUP LIMITED

Applicant

Hearing: 16 April 2019

Appearances:

S A Armstrong, A J Nelder and D J Raudkivi for Applicant S J P Ladd and A E Buchly for Titan

Judgment:

16 April 2019

ORAL JUDGMENT OF VENNING J

Solicitors: Russell McVeagh, Auckland
Bell Gully, Auckland

Re TRADE ME GROUP LIMITED [2019] NZHC 840 [16 April 2019]

Introduction

[1]Trade Me Group Limited (Trade Me) seeks final orders:

(a)approving the scheme of arrangement described in the Scheme Plan (attached as a schedule to the amended application) (Scheme);

(b)directing that the Scheme is binding with immediate effect upon:

(i)Trade Me;

(ii)Titan AcquisitionCo New Zealand Limited (Titan);

(iii)every person who is a shareholder (as defined in the Implementation Plan) (as at the record date as defined in the Scheme); and

(iv)such other persons as necessary to give effect to the Scheme;

(c)granting leave to Trade Me to apply to the Court for approval of any amendment, modification, or supplementation to the Scheme as may be required.1

[2] On 6 March 2019 this Court approved initial orders, including orders requiring the holding of a shareholders’ meeting on 3 April 2019 to enable shareholders to consider and, if they supported it, to approve the Scheme. The initial orders also set out the information to be provided to shareholders in advance of that meeting, and the steps a party was to take if they wished to oppose the application.2

[3] Trade Me has filed a number of affidavits in support of its applications. Affidavits have been filed by David Kirk, a director and chairman of Trade Me; Steven Kooyers, a director of Titan; Michael Lorimer, a director of Grant Samuel and

1 The orders sought are in an amended application. The amendments are minor and not substantive.
2 Re Trade Me Group Ltd [2019] NZHC 340.

Associates Ltd (Grant Samuels); Stuart Mutch, a partner in Ernst & Young; Caroline Rawlinson, the chief financial officer of Trade Me; and Yuan Wen, a solicitor.

Trade Me and the Scheme

[4] Trade Me through its subsidiaries operates a range of classified listing sites and is the largest internet auction site in New Zealand. It is currently listed on the NZX and dual listed on the ASX, has nearly 10,000 shareholders (almost all of whom are based in New Zealand and Australia) and net assets of approximately $750 million. If the Scheme is approved by the Court Titan, a New Zealand incorporated company owned by a series of private equity investment funds that are advised by Apax Partners LLP, (a leading global private equity advisory firm) will be permitted to acquire 100 per cent of Trade Me’s shares. In exchange for their shares each…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Trade Me Group Ltd

Details

AGLC: Re Trade Me Group Ltd [2019] NZHC 840
Case: [2019] NZHC 840
Decision Date: 16 April 2019

CaseChat Overview and Summary

Trade Me Group Limited, a leading internet auction site in New Zealand, sought court approval for a scheme of arrangement to facilitate a complete takeover by Titan Acquisition Co New Zealand Limited, a company backed by private equity funds advised by Apax Partners LLP. The scheme, which was the largest takeover by way of a scheme of arrangement in New Zealand's history, involved Titan acquiring 100% of Trade Me's shares in exchange for a consideration of NZ$6.45 per share, a price deemed fair by the independent adviser Grant Samuel and above the assessed value range for Trade Me shares. The legal issues before the court included whether Trade Me had complied with all statutory requirements, whether the scheme was fairly presented to shareholders, and whether the scheme could be considered fair and equitable.

The court found that Trade Me had fully complied with the statutory requirements, including the provision of necessary information to shareholders and the holding of a shareholders' meeting where the scheme received overwhelming support. The court was also satisfied that the scheme was fairly presented to the shareholders, who were given all necessary information to make an informed decision. Furthermore, the court determined that the scheme was fair and equitable, as the purchase price offered by Titan represented a significant premium over the previous trading price and was supported by the independent adviser's valuation. The court noted that the scheme was consistent with past applications and approvals of similar schemes.

Based on the findings, the court approved the scheme of arrangement, directing that it is binding on Trade Me, Titan, and all relevant shareholders, with immediate effect. The court also granted Trade Me leave to apply for any necessary amendments to the scheme. This decision ensures that the proposed takeover by Titan can proceed as planned, subject to the conditions specified in the scheme and the court's orders.

Orders