Statpro Group Plc, Re

The court sanctioned a scheme of arrangement under Part 26 of the Companies Act 2006 by which the entire issued and to-be-issued ordinary share capital of Statpro Group plc (Statpro) would be transferred to Ceres Bidco Limited in exchange for 230 pence per Scheme share. The judge found that the arrangement amounted to a compromise or arrangement within section 895(1), that the statutory majority under section 899(1) had been obtained at a properly convened court-ordered meeting under section 896(1), and that the scheme met the four Morgan J criteria from Re TDG Plc: statutory compliance, fair representation of the class, that an intelligent and honest member could reasonably approve the scheme, and absence of any technical or legal "blot". The court accepted Bidco's undertaking to be bound by the scheme and concluded that, because the scheme was a transfer scheme, creditors could not be prejudiced.

This was an application by Statpro Group plc for the court's sanction of a scheme of arrangement under Part 26 of the Companies Act 2006 to effect the sale of the company to Ceres Bidco Limited (Bidco), a subsidiary of an entity controlled by firms advised by TA Associates. The scheme was structured as a transfer scheme whereby Scheme shares would be transferred to Bidco for 230 pence per share, valuing Statpro at approximately £161.1 million.

The application record showed that a court-ordered meeting was held on 21 October 2019 in accordance with an order of Chief Insolvency and Companies Court Judge Briggs. The chairman's report demonstrated that the scheme was approved by the requisite statutory majority: 77 of 81 participating shareholders voted in favour (95 per cent in number) representing 99.97 per cent in value, with turnout 21.95 per cent in number and 72.16 per cent in value. The directors unanimously recommended the scheme and had received advice from Panmure Gordon (UK) Ltd.

Issues framed by the court included (i) whether the arrangement amounted to a compromise or arrangement under section 895(1), (ii) whether the statutory approval threshold under section 899(1) had been met at a meeting properly convened under section 896(1), and (iii) whether the court should exercise its discretion to sanction the scheme, applying the four matters identified by Morgan J in Re TDG Plc [2009] 1 BCLC 445 (statutory compliance; fair representation of the class; whether an intelligent and honest member might reasonably approve; and absence of any blot).

The court's reasoning was as follows: the transfer and cash consideration involved the requisite give and take to satisfy section 895(1); the meeting had been properly convened and the statutory majority achieved; the majority was bona fide and not coercive; an intelligent and honest member could reasonably approve the scheme given the significant premium to the undisturbed trading price, director recommendation and financial advice; and no technical or legal defect justified withholding sanction. The court also accepted Bidco's undertaking to be bound and noted that, as a transfer scheme, creditor interests could not be prejudiced. On those bases the court sanctioned the scheme.

Application allowed and the scheme of arrangement sanctioned. The court found all statutory and discretionary requirements satisfied: the arrangement amounted to a compromise or arrangement under section 895(1); the statutory voting threshold under section 899(1) was met at a properly convened meeting under section 896(1); the Morgan J criteria from Re TDG Plc were satisfied; and there was no legal or technical defect to prevent sanction. The court accepted Bidco's undertaking to be bound and noted no prejudice to creditors because the proposal was a transfer scheme.