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Schemes, Takeovers and Himalayan Peaks

The use of schemes of arrangement

Tony Damian and Andrew Rich

Regular price $425.00 Sale

Format: hardback
Other formats: Paperback $325.00
2032 pages
ISBN: 9780987519153

Publication: 23 Nov 2021

Publisher: Herbert Smith Freehills

Schemes, Takeovers and Himalayan Peaks provides a comprehensive review of the law and practice relating to the use of members’ schemes of arrangement to effect changes of control of widely held companies and the use of creditors’ schemes of arrangement to effect corporate restructurings.

This fourth edition covers developments since 2013 and around 800 new cases. In addition to its detailed analysis of schemes of arrangement in Australia, it examines the scheme procedure in England and certain other jurisdictions. It also discusses trust scheme mergers, reverse takeovers, private equity deals, demergers, stub equity structures, joint bids, redomiciliations and amalgamation and reconstruction transactions.

Previous editions of Schemes, Takeovers and Himalayan Peaks have been cited in more than 40 court decisions. It is an essential work for lawyers, barristers, directors, executives, investment bankers, insolvency practitioners and others involved in change of control transactions and corporate restructurings. It is also useful for students, and for those interested in the policies that underpin the laws and practices regulating change of control transactions and corporate restructurings.

 The book contains a foreword from leading company director Ilana Atlas AO.

Tony Damian and Andrew Rich are Partners at leading international law firm Herbert Smith Freehills. With half a century of deal experience between them, they have acted on some of Australia’s most significant public M&A and corporate restructuring deals.

1. Introduction
2. The Regulatory Landscape: Acquiring Widely Held Australian Companies
  • Introduction
  • The operation of, and exceptions to, the 20% rule
  • Public disclosure of interests
  • Other ownership restrictions
  • Takeover bids
  • Schemes of arrangement

3. The Scheme Procedure
  • What is a scheme of arrangement?
  • Types of members' schemes of arrangement that effect change of control transactions
  • Encumbered shares in members' schemes
  • Treatment of convertible securities under a members' scheme that is being used to effect a change of control transaction
  • Managed investment schemes
  • The role of the Takeovers Panel in schemes of arrangement
  • Indicative timetable: members' scheme to effect a change of control
  • Broker handling fees and proxy solicitation arrangements
  • Switching between a takeover bid and a scheme of arrangement

4. The Scheme Approval Process
  • Overview of the approval process
  • Stage 1 – the first court hearing
  • Stage 2 – the scheme meeting
  • Stage 3 – the final court hearing
  • Procedural irregularities
  • Right to object to a scheme
  • The Court's power to approve alterations to a scheme or to a deed poll before it approves the scheme
  • Amendments to a scheme after it has become effective
  • The timing of satisfaction of conditions in a scheme
  • How a scheme becomes effective and is implemented
  • Requirement to attach Court's approval order to the constitution
  • Unclaimed scheme consideration

5. The Principal Scheme Documents
  • Introduction
  • Confidentiality agreements, standstill arrangements and process deeds
  • The scheme implementation agreement
  • The "scheme itself"
  • Deed poll
  • Scheme booklet / explanatory statement
  • Independent expert's reports in members' schemes
  • The scheme booklet and additional information sent to members or creditors (as the case may be)
  • The liability regime
  • ASIC's modification and exemption powers
  • Court documents and evidence
  • ASIC review and registration of scheme documents
6. Classes, Interests and Equality of Opportunity in Schemes
  • Introduction
  • Classes
  • Extraneous interests and restrictions on the freedom to vote
  • Examples of the application of the class test and the relevance of extraneous interests
  • Equality of opportunity in schemes
  • Possible law reform: giving the Court additional powers in relation to classes and interests

7. Deal Protection Devices
  • Introduction
  • Break fee arrangements
  • Exclusivity arrangements
  • Pre-scheme agreements – members' and creditors' schemes
  • Voting intention statements and last and final statements in members' schemes
  • Other forms of deal protection devices

8. The Role of Schemes of Arrangement
  • Introduction
  • Comparing schemes and takeovers
  • When schemes are used

9. Other Transactions by way of Scheme
  • Introduction
  • Reconstructions and amalgamations
  • Reverse takeovers
  • Demergers
  • Redomiciliations
  • Demutualisations
  • Private equity
  • Proportional schemes
  • Joint bids
  • Trust schemes
  • Creditors' schemes and "loan to own" acquisition strategies
  • Alternative structures when schemes fail

10. The Early History and Parliament's Approach
  • Introduction
  • The approach of the Courts – before the introduction of subsection 411(17)
  • The approach of Parliament
11. Interpretation and Application of Subsection 411(17)
  • Introduction
  • No legislative or parliamentary preference for takeover bids
  • Interpretation the Courts and ASIC have given to subsection 411(17)
  • Relevance of subsection 411(17) to the Court's fairness discretion
  • ASIC's approach in giving a No Objection Statement
  • The technical approach to subsection 411(17)
  • Overview of the cases on subsection 411(17)
  • Treasury's consideration of the use of schemes to effect change of control transactions
  • Approach of the Takeovers Panel in relation to change of control transactions effected by scheme
  • Possible law reform: the repeal of subsection 411(17)
12. Schemes of Arrangement In England
  • Introduction
  • Types of English schemes of arrangement
  • History of the scheme of arrangement provisions
  • Restructuring plans under Part 26A of the Companies Act 2006
  • Companies that may be the subject of an English scheme
  • Disclosure and pricing requirements
  • Member, creditor and court approval requirements
  • Settlement of consideration
  • Deadline for rival proposals from identified potential bidders
  • Revisions or improvements to a scheme of arrangement
  • Switching from a takeover to a scheme or vice versa
  • Treatment of convertible securities (including options)
  • Approval of authorised persons
  • Hostile schemes
  • Relative usage of the scheme of arrangement regime in England
  • Reforms
  • Other structures for acquiring public listed companies - statutory mergers
  • Exemptions from the UK securities laws for Australian schemes

13. The Position In Delaware, Canada, Europe, New Zealand, Hong Kong, Singapore and South Africa
  • Introduction
  • Delaware (USA)
  • Canada
  • Europe – Belgium, France, Germany, Italy, The Netherlands and Spain
  • New Zealand
  • Hong Kong
  • Singapore
  • South Africa

14. Passing Up Everest: In Defence of Schemes of Arrangement
  • Introduction
  • Protections for dissentients and minorities in schemes
  • Comparative protection with other transaction types
  • Protections versus economic efficiency
  • Other criticisms of schemes of arrangement
  • The relative use of the scheme procedure
  • Possible law reform: a broader role for the Takeovers Panel in schemes?
  • Conclusions in relation to the protections in schemes
15. Creditors' Schemes of Arrangement
  • What is a creditors' scheme of arrangement?
  • Stay of other proceedings
  • Amend and extend schemes and loan to own strategies
  • Third party releases
  • Various features of creditors' schemes
  • Disclosure requirements for explanatory statements in creditors' schemes
  • Scheme administrators
  • Shareholder compensation claims
  • Foreign law and foreign recognition issues
  • Case studies of various Australian creditors' schemes
16. Deeds of Company Arrangement
  • The introduction, and key features, of deeds of company arrangement
  • The limitations of DOCAs
  • Takeovers Panel interactions in DOCAs
  • Compulsory transfer of shares – section 444GA

17. A Final Policy and Reform Perspective
  • Introduction
  • Member protection and policy alignment
  • Summary of the authors' reforms
  • Concluding remarks

Format: hardback
Size: 246 × 169 × 50 mm
2032 pages
Copyright: © 2021
ISBN: 9780987519153
Publication: 23 Nov 2021