SABmiller Plc, Re

In a scheme of arrangement, the court may summon a meeting of only some members or creditors with whom the scheme is proposed where the others voluntarily agree to be bound and waive participation in the meeting. Sections 895 and 896 of the Companies Act 2006 should be construed flexibly and purposively to facilitate compromises and arrangements.

The ordinary class test remains based on the similarity of legal rights against the company and on rights released, varied or conferred by the scheme. Differences in private interests or commercial preferences do not, without more, require separate meetings.

SABMiller applied under section 896 of the Companies Act 2006 for an order summoning a single meeting of its public shareholders to consider a scheme implementing the acquisition of SABMiller by Newbelco, as part of the proposed AB InBev transaction.

Altria and BEVCO, SABMiller’s two largest shareholders, supported the transaction and undertook to be bound by the scheme, but were not to vote at the proposed meeting. Soroban, also supportive of the scheme, argued that the court had no jurisdiction to summon a meeting excluding shareholders with whom the scheme was proposed. The central issue was whether voluntary exclusion and undertakings to be bound were permissible at the convening stage.

1. Jurisdiction. The court had jurisdiction to summon a meeting of the Public Shareholders without Altria and BEVCO, provided that those shareholders consented to be bound by the scheme and agreed to forgo their rights to participate in the meeting.
2. The class inquiry is directed to the similarity or dissimilarity of legal rights against the company, including rights released or varied by the scheme and rights conferred in their place. Persons whose rights are so dissimilar that they cannot sensibly consult together with a view to their common interest require separate meetings. Divergent private interests or commercial views, without a difference in legal rights, do not require separate meetings.
3. The statutory wording recognises that affected members or creditors ordinarily have an opportunity to attend and vote. It does not prevent them voluntarily waiving or forgoing that opportunity. A shareholder who gives an undertaking to be bound is not subjected to the statutory compulsion which makes careful class constitution necessary.
4. This construction accords with the purpose of the scheme jurisdiction, namely to facilitate compromises or arrangements where unanimous consent cannot be obtained. It also avoids unnecessary side agreements and permits the parties’ arrangements to be dealt with openly in one scheme document.
5. The proposed course did not usurp the court’s function on class composition. The relevant consideration was Altria’s and BEVCO’s consent to be bound while foregoing participation in the process by which a majority might bind dissentient or absent shareholders. The court would hear further submissions on whether to summon the proposed meeting and on consequential directions.