FEDERAL COURT OF AUSTRALIA

Gerard Lighting Group Limited, in the matter of Gerard Lighting Group Limited [2012] FCA 941

IN THE MATTER OF GERARD LIGHTING GROUP LIMITED ACN 141 079 594

THE COURT ORDERS THAT:

1    Pursuant to section 411(1) of the Corporations Act 2001 (Cth) (Act) there be convened a meeting (Scheme Meeting) of holders of fully paid ordinary shares of the plaintiff (Gerard Lighting Shareholders), for the purpose of considering and, if thought fit, approving (with or without modification) the scheme of arrangement between them and the Plaintiff (Scheme), the terms of which are set out in Exhibit A in the proceeding (Scheme Booklet).

2    The Scheme Meeting be held at the Sebel Playford, 120 North Terrace, Adelaide, South Australia on 5 October 2012 at 11:00am (Adelaide time).

3    The explanatory statement in the Scheme Booklet be approved for distribution to Gerard Lighting Shareholders.

4    On or before 5:00pm on 5 September 2012 there be despatched by prepaid ordinary post (or in the case of overseas members, by airmail) to each Gerard Lighting Shareholder appearing in the register of the Plaintiff’s shareholders at 7:00pm (Sydney time) on 29 August 2012:

(a)    a document substantially in the form of the Scheme Booklet comprising the explanatory statement for the Scheme;

(b)    a letter from the Chairman of the Plaintiff to Gerard Lighting Shareholders, a copy of which is at Annexure ‘JSK13’, page 46 of the affidavit of John Storrie Keeves sworn on 24 August 2012 (Keeves Affidavit);

(c)    notice of meeting for the Scheme Meeting, which is attached at Appendix 5 to the Scheme Booklet; and

(d)    a proxy form for the resolution to be passed at the Scheme Meeting, a copy of which is at Annexure ‘JSK13’, page 47 of the Keeves Affidavit, together with a reply paid envelope and fly sheet.

5    A form of proxy in respect of the Scheme Meeting will be valid and effective if:

(a)    delivered to the Plaintiff care of Computershare Investor Services Pty Limited by use of the reply paid envelope; or

(b)    delivered to the Plaintiff at the Plaintiff’s registered office at 101 Port Wakefield Road, Cavan, South Australia, 5094; or

(c)    received by mail at:

i.    the Plaintiff’s registered office at 101 Port Wakefield Road, Cavan, South Australia, 5094; or

ii.    the Plaintiff care of Computershare Investor Services Pty Limited, GPO Box 242, Melbourne, Victoria, 3001; or

(d)    successfully transmitted by facsimile to:

i.    the Plaintiff’s registered office; or

ii.    the Plaintiff at care of Computershare Investor Services Pty Limited on 1800 783 447 (from within Australia) or +61 3 9473 2555 (from outside Australia),

in each case provided the proxy is received not later than 11:00am (Adelaide time) on 3 October 2012.

6    The Chairperson of the Scheme Meeting be Richard Hugh Allert and, in his absence, Graham Douglas Walters.

7    The Chairperson appointed to the Scheme Meeting, and in his absence the alternative Chairperson, has the power to adjourn the meeting in his absolute discretion.

8    All voting at the Scheme Meeting (other than voting on any procedural motion) be by poll as declared by the Chairperson.

9    The Plaintiff publish once, substantially in the form of the document attached and marked ‘Attachment A’, in the Australian newspaper, the Sydney Morning Herald newspaper and the Adelaide Advertiser a notice of hearing of any application to approve the Scheme under section 411(4) of the Act on or before 8 October 2012, and the Plaintiff shall otherwise be exempted from compliance with the requirement to publish such notices at least 5 days before the date fixed for the hearing of the application pursuant to Rule 3.4(3)(b) of the Federal Court (Corporations) Rules 2000 (Cth) (Rules).

10    The Plaintiff be excused from complying with Rule 2.15 of the Rules, except in so far as that rule applies Regulation 5.6.13 of the Corporations Regulations 2001 to the meetings.

11    The proceedings be stood over to 10 October 2012 at 9.30 am before Justice Jagot for the hearing of any application to approve the Scheme.

12    The Plaintiff has liberty to apply.

13    These Orders to be entered forthwith.

Note:    Settlement and entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ATTACHMENT A

Notice of hearing to approve compromise or arrangement

(rule 3.4)

To all the creditors and members of Gerard Lighting Group Limited (ACN 141 079 594).

Take notice that at 9.30 am on 10 October 2012, the Federal Court of Australia at Level 17, Law Courts Building, Queens Square, Sydney New South Wales will hear an application by Gerard Lighting Group Limited seeking the approval of a compromise or arrangement between the above-named company and its members, if agreed to, by resolution to be considered by the members of Gerard Lighting Group Limited at a meeting of such members to be held on [5 October 2012].

If you wish to oppose the approval of the compromise or arrangement, you must file and serve on the plaintiff a notice of appearance, in the prescribed form, together with any affidavit on which you wish to rely at the hearing. The notice of appearance and affidavit must be served on the plaintiff at its address for service at least 1 day before the date fixed for the hearing of the application.

The address for service of the plaintiff is c/- Johnson Winter & Slattery, Level 10, 211 Victoria Square, ADELAIDE SA 5000.

Name of person giving notice or of person’s legal practitioner:

Mr John Keeves

Johnson Winter & Slattery

Solicitors for the plaintiff

IN THE MATTER OF GERARD LIGHTING GROUP LIMITED ACN 141 079 594

REASONS FOR JUDGMENT

1        This is an application under s 411(1) of the Corporations Act 2001 (Cth) (the Act) by the plaintiff, Gerard Lighting Group Limited, for orders convening a meeting of its shareholders to vote on a proposed scheme of arrangement. The plaintiff is a public company listed on the Australian Securities Exchange. Under the proposed scheme all of the ordinary shares in the plaintiff will be transferred to Lighting Investments Australia Pty Limited (Lighting Investments) in consideration for the payment of $1.05 in cash for each ordinary share of the plaintiff and by reason thereof the plaintiff will become a wholly owned subsidiary of Lighting Investments. Lighting Investments is a private company registered under the Act for the purpose of acquiring all of the shares of the plaintiff.

2        The application is supported by affidavit evidence which establishes each of the factual matters set out in the outline of the plaintiff’s submissions for this first court hearing. In summary, the plaintiff and Lighting Investments entered into a scheme implementation agreement on 18 July 2012 and the Gerard family, who are shareholders of 52% of the issued share capital of the plaintiff, announced on the same day that they supported the proposed scheme and intended to vote in favour of it in the absence of a superior proposal.

3        As set out in the submissions, the approach of the Court at the first hearing is that it will not ordinarily summon a meeting unless the scheme is of such a nature and cast in such terms that if it receives the statutory majority at the meeting the Court would be likely to approve it on the hearing of an application that is unopposed. In this regard, based on the affidavit material and the submissions which have been put, I see no reason why I cannot reach that state of satisfaction.

4        As set out in the affidavits and in the proposed arrangements for the scheme, it is intended that the scheme be implemented by Lighting Investments depositing the scheme consideration into a trust account operated by the plaintiff as trustee for its shareholders before 10 am on the proposed implementation date. On the implementation date, and subject to compliance with the deposit requirement, all of the shares in the plaintiff will then be transferred to Lighting Investments. Further, the obligations of Lighting Investments under the scheme are backed up by a deed poll given by Lighting Investments in favour of the shareholders of the plaintiff.

5        The evidence includes the position of the independent directors of the plaintiff who unanimously recommended that, in the absence of a superior proposal, the plaintiff’s shareholders vote in favour of the scheme at the proposed scheme meeting. In addition, the independent expert has provided an affidavit which confirms that their opinion remains that the scheme is fair and reasonable and in the best interests of the shareholders, noting that the value of the shares is between $1.05 and $1.17 and the proposed scheme consideration is within albeit at the bottom end of that range.

6        It is proposed that there be a single meeting of shareholders and for the reasons set out in the plaintiff’s submissions I am satisfied that it cannot be said that there is any issue requiring separate classes to be constituted. The Gerard family are shareholders as to 52% of the shares and there are also shareholders of the plaintiff who hold options to acquire shares in Gerard Lighting, but there is no reason why those shareholders cannot all vote as proposed, their interests not being significantly dissimilar to those of the other shareholders having regard to the terms of the scheme.

7        In terms of the option holders, it is proposed and arrangements will be implemented for them to each execute an option cancellation deed subject to the implementation of the scheme by which they will be paid out at the difference between the scheme consideration and the value of their options. In addition, it is noted that at the meeting which is proposed to be held a separate record of those votes will be kept and will be provided to the Court at the second hearing.

8        Otherwise, the issues of performance risk are dealt with in orthodox terms by reason of the trust account and the deed poll to which I have referred. My attention has been drawn to the exclusivity provision which also is in orthodox terms and provides for an exclusivity period which will expire on 31 December 2012 unless that period is extended by agreement. The exclusivity provisions have also been subject to the usual carve-out in respect of fiduciary obligations. There is evidence which satisfies me that the break fee which has been negotiated in the sum of $1.863 million is not one that according to the terms of the arrangement is payable merely because the shareholders vote down the scheme. It otherwise has been the result of arms’ length negotiations, having regard to the costs which will be incurred by Lighting Investments in relation to its actions in respect of the proposed scheme of arrangement. The scheme documents also draw attention to the deemed warranty by the shareholders that their shares will be free from encumbrances.

9        The procedural requirements have also been satisfied. There is in evidence details of the dealings between the plaintiff and the Australian Securities & Investments Commission (ASIC) which culminated in a letter dated 28 August 2012 from ASIC to the effect that it does not currently propose to appear to intervene to oppose the above scheme at the first court hearing and indeed ASIC has not appeared today.

10        Otherwise, all procedural requirements have been satisfied and I can see no reason not to make orders in accordance with the short minutes of order dated 29 August 2012.

Associate:

Dated:    30 August 2012