[2007]JRC179
royal court
(Samedi Division)
26th September 2007
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Before :
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M. C. St. J. Birt, Esq., Deputy Bailiff, and
Jurats de Veulle, and Newcombe.
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IN THE MATTER OF THE REPRESENTATION OF
ANDSBERG LIMITED
AND IN THE MATTER OF PART 18a OF THE
COMPANIES (JERSEY) LAW, 1991.
Advocate D. R. Wilson for the Representor.
Advocate S. M. Gould
for the Excluded Shareholders.
Advocate M. E. Millar for Lanzville.
judgment
the deputy bailiff:
1.
This is an
application under Article 125 of the Companies (Jersey)
Law 1991 for the Court’s sanction of a scheme of arrangement between
the company in question and its members.
2.
The
background to the application is that the company Andsberg Limited, a Jersey
company, was demerged from a company called Antofagasta Plc. As Andsberg was to be an unquoted
company, investors in Antofagasta were given the opportunity of redeeming their
Andsberg shares at that time, and such redemptions were funded by a fresh issue
of shares to entities associated with the Luksic family. But a number of shareholders did
not sell and they have remained as shareholders of Andsberg.
3.
The
company has an issue share capital of 138,479,526 redeemable ordinary shares
and 58,691,813 non-redeemable ordinary shares of US$0.00001 each, and two
non-redeemable ordinary shares of US$1 each. All of the non-redeemable ordinary
shares and the great majority of the redeemable shares are held by the Luksic
entities and these are referred to as the “excluded shares”. Indeed, less than 5% of the redeemable
shares are held by independent shareholders, and it is those shares which are
the subject of this scheme of arrangement, and they have been referred to as
the “scheme shares”.
4.
The
company only has two assets of note, other than cash. One is a small shareholding in Banco de
Chile, but the only substantial asset of the company is a 33% shareholding in
Quiňenco S A, a company listed on the Chilean stock exchange.
5.
It appears
that the shares in Quiňenco have increased quite significantly in value
since the demerger, but there is, of course, no mechanism by which shareholders
in Andsberg can realise their shares at present. Although Andsberg is a public company
because of the number of shareholders, its shares are not listed on any stock
exchange. We are told that a number
of the scheme shareholders have indicated to the board of Andsberg that they
would like the opportunity of being able to realise their investment.
6.
So it is
these circumstances that Lanzville Investments Establishment, a Liechtenstein
establishment, has on behalf of the Luksic family made an offer to acquire all
the outstanding redeemable shares, provided that the matter proceeds by way of
a scheme of arrangement. The result
of this, of course, is that if the requisite majorities are obtained, Lanzille
will acquire all the outstanding shares, even those of persons who were not in
favour of selling at this stage.
The price offered is $4.1854 per share by way of a cash offer.
7.
Now the
test which the Court must apply in such matters is well established. The Court has convened the necessary
meetings, which have now been held, and the Court must now consider three
things: first, that the provisions of the Statute have been complied with;
secondly, that the class was fairly represented by those who attended the
meeting and that the statutory majority are acting bona fide and are not coercing the minority in order to promote
interests adverse to those of the class whom they purport to represent; and
thirdly, that the arrangement is such as an intelligent and honest man, a
member of the class concerned and acting in respect of his interest, might
reasonably approve.
8.
Taking
each of those in turn, we are satisfied that the statutory provisions have been
complied with. At the meeting of
scheme shareholders there were 108 members in favour and 14 against. This represented, in terms of
shareholdings, 93.06% in favour and 6.94% against. The requisite majorities required by the
statute have therefore been met.
9.
The second
issue is whether the class is fairly represented and the majority have been
acting bona fide. Now the important aspect here is that
the meeting consisted solely of scheme shareholders, in other words, solely of
those who are not members of the Luksic family. All of the Luksic shares were treated as
excluded shares and the shareholders were not convened to the meeting. Of the scheme shareholders 122 out of
369 either attended, or were represented by proxy, at the meeting and those who
voted constituted 52.7% of the total number of scheme shares. So we consider that the class was indeed
fairly represented and there is no evidence of a majority of those shareholders
coercing the minority in any way.
10. The third matter we must consider is whether an
intelligent and honest man acting in respect of his interest as a scheme
shareholder might reasonably approve the scheme. The price payable for the shares is
based upon the net asset value of the company, which in turn is based upon the
price of the Quiňenco shares.
No discount for the fact that a minority shareholding is being acquired
has been built into the price; it is simply based on the net asset value. Furthermore, and most importantly, the
only director of Andsberg who has considered this matter is an independent
director. He has, in turn, sought
advice from J P Morgan Cazenove, who have therefore been looking after the
interests of the scheme shareholders. In the scheme documentation it is stated
that the director advised by J P Morgan Cazenove considers the scheme, and
particularly the price, to be fair and reasonable and J P Morgan Cazenove have
consented to that appearing in the documentation. J P Morgan Cazenove are to be taken as
having given that opinion and that gives the Court additional comfort. In all the circumstances we are
satisfied that this is indeed a scheme of which a reasonable and intelligent
person could approve.
11. In all the circumstances we think that the
requirements have been met and we approve this scheme and we approve the draft
act.
Authorities
Companies (Jersey)
Law 1991.