Capilano Honey Limited, in the matter of Capilano Honey Limited (No 2) [2018] FCA 1925

FEDERAL COURT OF AUSTRALIA

Capilano Honey Limited, in the matter of Capilano Honey Limited (No 2) [2018] FCA 1925 File number(s): NSD 1786 of 2018

Judge(s): FARRELL J

Date of judgment: 23 November 2018

Date of publication of reasons: 30 November 2018

Catchwords: CORPORATIONS – application to approve a scheme pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) – scheme designed to effect a takeover of the target company – where there are cash and scrip alternatives as scheme consideration – where the scrip consideration is shares in a proprietary company which is the holding company of the bidder – where proposal described as a "stub equity" proposal by a private equity consortium which will hold a majority of the shares issued by the bidder's holding company – where acceptances for scrip consideration are received from more than 50 members of the target company – where scrip consideration will be issued to a custodian for target company shareholders who elected to receive scrip consideration – where ASIC refused to provide a "no objection" letter under s 411(17)(b) of the Corporations Act – whether the scheme was proposed for the purpose of enabling a person to avoid the operation s 606 or s 650C of the Corporations Act – whether the use of the custodian structure was contrary to public policy – application granted

Legislation: Companies (Acquisition of Shares) Act 1981 (Cth) s 11 (repealed) Corporations Act 2001 (Cth) Ch 2E, 6, 6D, Pt 5.1, ss 113, 165, 169, 195, 201A, 201E, 249H, 250N, 411, 602, 606, 609, 650C, 708, 1072H, 1319 Companies Act 1961 (Vic) s 181 (repealed) Explanatory Memorandum for the Companies and Securities Legislation (Miscellaneous Amendments) Bill 1981 (Cth) Explanatory Memorandum to the Companies (Acquisition of Shares) Bill 1980 (Cth) Explanatory Memorandum to the Companies Bill 1981 (Cth)