blocking a scheme of arrangement

This is Mr Lincoln Augustus, first second cousin of Holymagiman

6.30 am on a rainy Saturday morning and there are things that have to be done that must be done, so I will not tarry on for too long.

We had a good dinner last night, with the Red stripe flowing and the Numba Ones smoking and by and by, the talk got to matters mundane and totally unimportant.

And as part of this frivolous triviality, Uncle Tobias happened to talk about Schemes of Arrangement, and what with one thing leading to another, Orion’s name got mentioned.

I think it was Charlie Bok Chin who brought Orion's name up, and he had good reason to be thinking about it, seeing as how his soon to be second wife’s first brother-in-law was thinking of buying a few shares in this company.

I am not too sure how that is going to pan out, the wedding I mean, seeing as how Charlie Bok Chin already has a third and a fourth wife, of which his first wife does not know anything about. Still, Kingston is a big place and I am sure Charlie will be able to fit his second wife somewhere in between the other three, if you follow what I mean.

Anyway, I digress. It seems to us that the Orion deal with Gas2Grid is a Scheme of Arrangement. Now, for a scheme of arrangement to succeed, the company has to call a General Meeting, and I refer you to this site for further clarification:

http://www.findlaw.com.au/article/8920.htm

The important facts to consider are these:

• a set date. Either shareholders and the court approve the scheme, in which case, the acquirer will obtain 100 per cent of the target or the scheme is not approved and the bidder gets nothing.

This means that if shareholders approve, then the minority shareholders will have to accept the majority’s approval and consent to the merger.


• Thresholds to reach 100 per cent: Under a scheme, in order to obtain 100 per cent of the target, a bidder needs a majority of shareholders by number present and voting at a general meeting who represent 75 per cent by value of the shares present and voting to approve the scheme. By contrast, under a takeover bid, the holders of at least 90 per cent of shares must take positive action to accept the bid before the outstanding minorities can be compulsorily acquired.

This is very interesting. There are 2 parts to this, the 2 parts being:

1st part: the MAJORITY of shareholders PRESENT BY NUMBER at the General meeting have to approve, and

2nd part: the shareholders who approve have to have 75% BY VALUE OF THE SHARES PRESENT to approve the scheme

So, if enough shareholders go to the general meeting and the majority of shareholders present vote against the scheme of arrangement, then the 2nd part of the requirements will not even have to be considered, and the scheme of arrangement will be dead in the water.

And if the majority of shareholders present at the General Meeting vote to approve, then they have to have at least 75% of the total value of shares present at the meeting to carry the Scheme of Arrangement over the line.

So if there are any who disapprove of the proposal, then I am sure they will turn up at the General Meeting to vote against it, and maybe partake of a nice cup of free tea.

And if, perchance,there is some Jamaica Numba One on offer, then who knows who will vote for what, but to the best of our knowledge,Australian companies are not so inclined, so at best, the General Meeting will probably be dull and boring.


Blessing of the Lord
MLA