Promina Group Limited, in the matter of Promina Group Limited [2006] FCA 1772

1 On 14 December 2006, orders were made convening a meeting of the shareholders of the publicly listed Promina Group Limited (Promina) pursuant to s 411 of the Corporations Act 2001 (Cth) to consider a scheme of arrangement providing for the acquisition of the shares in Promina by Suncorp Insurance Holdings Ltd, a wholly owned subsidiary of the publicly listed Suncorp-Metway Limited (Suncorp). The reasons for those orders follow. The proposed transaction is large but the scheme itself is relatively straightforward. Suncorp’s subsidiary will acquire the shares in Promina for consideration in cash and shares.

2 I am satisfied that there has been compliance with the statutory formalities.

3 I am satisfied that the structure of the scheme is effective and appropriately safeguards the interests of shareholders in the event that the scheme is approved. It effectively removes the performance risk to which I have referred in other cases (eg Re SFE Corporation Ltd (2006) 59 ACSR 82; [2006] FCA 670; Re Tempo Services Ltd (2005) 53 ACSR 523 at 524; [2005] FCA 410).

4 I am satisfied that the proposed procedure complies with the statute and with the applicable authorities. It is not proposed that ineligible foreign shareholders constitute a separate class (Re Hills Motorway Ltd (2002) 43 ACSR 101 at 104; Re SFE Corporation Ltd at [8]).

5 The exclusivity period and break fee are not such as to cause concern (Re SFE Corporation Ltd at [7]). The position of foreign shareholders, reset preference shareholders and participants in share plans has been explained.

6 The directors recommend the scheme. Australian Securities and Investments Commission and Australian Prudential Regulatory Authority have indicated that no opposition is likely.

7 The Scheme Booklet is in appropriate form to enable shareholders to make a commercial decision. It includes an independent expert report based upon valuations, an independent actuary’s report and an accountant’s report. The Court does not, of course, approve the merits of the contents of the Booklet.

8 A particular order is required to deal with the publication of further financial results by both Promina and Suncorp prior to the scheme meeting. It is necessary that the independent expert consider the effect, if any, of those results upon the opinions expressed and that there be communication with the shareholders about that (Re Hills Motorway Ltd at 106).

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated: 18 December 2006

Counsel for the Plaintiff:	Mr F Gleeson SC, Mr RA Dick

Solicitor for the Plaintiff:	Freehills

Counsel for Suncorp-Metway Limited:	Mr TF Bathurst QC


Solicitor for Suncorp-Metway Limited:	Corrs Chambers Westgarth

Date of Hearing:	14 December 2006

Date of Orders:	14 December 2006

Date of Reasons:	18 December 2006

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