The High Court has sanctioned Readymix Plc’s scheme of arrangement to acquire the shares held by shareholders outside the Cemex group, rejecting objections from two shareholders. Mr Justice Kelly also granted the requested confirmation of the related reduction in the company’s share capital, without modifications or undertakings from company officers.
The judgment, delivered on 16 May 2012, followed a court-directed shareholder meeting on 5 April. Of 294 shareholders present or represented, 286 voted in favour of the scheme, representing 19,694,692 shares; eight voted against, representing 2,179,402 shares. The judge said the supporters accounted for 96.94% of shareholders by number and 90.04% of the shares represented at the meeting.
Under the scheme, Readymix Investments, a wholly owned subsidiary of Cemex España S.A., was to acquire the “scheme shares” for 25 cents each. Those shares would then be cancelled, with new shares issued to Readymix Investments or its nominees. The transaction would make Readymix a wholly owned indirect subsidiary of Cemex España.
The objectors challenged disclosure of payments Readymix made to Cemex, citing an alleged total of more than €12 million over six years. The company’s evidence described payments under a commercial arrangement for Cemex’s operating system and related support, and put the total cost through the end of 2011 at €6.5 million. The judge found the arrangements had been sufficiently disclosed in company accounts and shareholder materials, and that there was a commercial justification for the payments. He ruled that the objectors had not discharged the burden of proof on this objection.
They also relied on allegations of below-cost selling, price fixing and other anticompetitive conduct, which the company denied. The judgment noted that related proceedings had not gone to trial and that the allegations had not been proved. The judge said they could not be used as a collateral way to defeat the scheme and disallowed this objection.
A further objection concerned online proxy voting and alleged inconsistencies in proxy deadlines. The judge found no evidence of confusion, wrongful handling of votes or a system breakdown, and held that no substantive defect had been established.
In granting the relief, the judge found that interested parties had been notified, statutory and court requirements were met, the shareholder class was correctly constituted, and there was no coercion. He concluded that a member of the class acting in their own interest might reasonably approve the scheme. He declined to impose modifications or require undertakings, saying there was no evidence of wrongdoing to justify them.