Telford Homes Plc, Re

The court sanctioned a scheme of arrangement under Part 26 of the Companies Act 2006 to enable CBRE Group Inc to acquire the entire issued share capital of Telford Group plc. The court applied the established statutory and judicial tests, including the requirements identified in Re TDG plc, and concluded that the statutory requirements had been complied with, the single class of shareholders was fairly represented, the requisite statutory majorities had been obtained and there was no technical or legal defect (no blot) requiring refusal. The court also noted its broad but judicially exercised discretion and that it would respect the commercial judgment of those involved.

This was an application for the sanction of a scheme of arrangement under Part 26 of the Companies Act 2006 to give effect to a takeover by CBRE Group Inc of Telford Group plc. The proposed consideration was 350 pence per scheme share. The directors unanimously recommended the proposal and had been advised by NM Rothschild & Sons Ltd. The court was referred to authoritative commentary and to the fourfold matters described in Re TDG plc that require attention when sanctioning a scheme: compliance with statutory procedure; fair representation of the class and bona fide conduct of the statutory majorities; that an intelligent and honest member of the class might reasonably approve; and absence of any blot (supervening technical or legal defect).

The court summarised the voting at the court-ordered meeting: 333 shareholders participated, of whom 258 voted in favour and 75 voted against, giving 77.46% in number and 93.5% in value in favour. Turnout of all scheme shares (including non-participants) was 27.02% in number and 48.55% in value. The judge accepted that those turnout figures did not provide a reason to refuse sanction. The judge also observed that although the share price had been higher at other times, the relevant comparison was the price at the time of the proposed scheme.

The court concluded that all statutory provisions were met, the class was fairly represented, the statutory majorities were properly obtained, no blot existed, and therefore the court should exercise its discretion to sanction the scheme.

Application for sanction of the scheme granted; the court sanctioned the scheme because the statutory requirements (including those identified in Re TDG plc) were satisfied, the class was fairly represented, the statutory majorities had been obtained, an intelligent and honest member might reasonably approve and there was no blot.