Chevron (TAPL) Pty Ltd v Chevron Australia Pty Ltd, in the matter of Chevron

Energy Fuels is a United States-based uranium and critical materials company, incorporated in the Province of Ontario, Canada, but with its office in Colorado. It produces several raw materials, including rare earth elements, uranium and vanadium. I was told that it is the largest producer of uranium in the United States, and that its White Mesa Mill in Utah is the only operating conventional uranium mill in North America capable of processing uranium and rare earth elements through solvent extraction at scale. Energy Fuels is subject to the laws of Ontario, the applicable laws of Canada and applicable United States federal securities laws. Its shares are listed on the New York and Toronto stock exchanges

The acquisition of ASM would be undertaken through Energy Fuels’ nominated subsidiary, EFR Critical Materials Pty Ltd.

The proposed transaction comprises two separate but concurrent schemes of arrangement:

A scheme implementation deed was entered into by ASM and Energy Fuels in January 2026, and has subsequently been amended and restated.

If the share scheme becomes effective, EFR will acquire all ASM Shares on issue as at the scheme record date.

The scheme consideration for the ASM shares comprises both scrip (CHESS depository interests in EFR shares or fully paid EFR shares) and cash. A scheme shareholder can elect to receive the scrip component of the consideration as CDIs or EFR shares.

To the extent Energy Fuels and its subsidiaries hold shares in ASM, they are excluded from the operation of the share scheme.

The transfer of the scheme shares from scheme shareholders to EFR is subject to the scheme consideration being provided on the scheme implementation date.

If the option scheme becomes effective, EFR will acquire all ASM options on issue as at the option scheme record date, the consideration being by way of cash.

Similarly, the transfer of the scheme options from scheme optionholders to EFR is subject to the scheme consideration being provided on the scheme implementation date.

The option scheme is conditional on the share scheme becoming effective.

ASM relied on three affidavits affirmed by Mr Matthew Johnson, and affidavits of each of Ms Rowena Smith and Mr Ross Bhappu.

Mr Johnson is the partner at A&O Shearman who advised ASM on the scheme. He provided evidence as to the preparation of the draft scheme booklet and its provision to ASIC, together with copies of documents intended to be dispatched to the shareholders and optionholders and the Court documents. Mr Johnson also adduced evidence of a number of communications from ASIC about the schemes. An Independent Expert Report prepared by BDO Corporate Finance Australia Pty Ltd was an annexure to the draft scheme booklet.

Ms Smith is the managing director and chief executive officer of ASM. She adduced evidence as to the business and capital structure of ASM, the background to the schemes, the verification process undertaken by ASM of the information relating to it in the scheme booklet and the expectation that conditions precedent could be met. Importantly, Ms Smith disclosed the interests held by various board members, including her own, a matter to which I will return. Ms Smith also adduced evidence of consent from Mr Gavin Smith to act as chairperson and the consent of the proposed alternate chairperson. I will return to both of these matters.

Mr Bhappu is the president, the chief executive officer and a director of Energy Fuels, and a director of EFR. He deposed to the business and capital structure of Energy Fuels and the verification process undertaken by it as to the information in the scheme booklet about Energy Fuels.

The Court was also provided with a compliance checklist that referenced the manner in which the information prescribed by s 411(3) and s 412 of the Corporations Act 2001 (Cth) and reg 5.1.01 and Sch 8 of the Corporations Regulations 2001 (Cth) was disclosed.

The papers were expressly prepared having regard to the courts’ harmonised approach to schemes of arrangement, adopted in this Court by the Schemes of Arrangement Practice Note (GPN-SOA).

These matters are distilled from and discussed in many authorities, including CSR Limited, in the matter of CSR Limited [2010] FCAFC 34; (2010) 183 FCR 358 at [7] (Keane CJ and Jacobson J); Amcom Telecommunications Limited, in the matter of Amcom Telecommunications Limited [2015] FCA 341 at [9] (McKerracher J); Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [2018] WASC 308 at [46]-[78] (Vaughan J); In the matter of Ovato Print Pty Ltd [2020] NSWSC 1683 at [19] (Black J); and Chevron (TAPL) Pty Ltd v Chevron Australia Pty Ltd, in the matter of Chevron (TAPL) Pty Ltd [2022] FCA 220 at [17]-[20].

There is no question that ASM falls within the definition of a Part 5.1 body.

Nor is there any issue that the proposal before the Court is an arrangement. It concerns a change in the rights of members in their capacity as members of and is of a nature recognised as an arrangement. I do not consider the exclusion of Energy Fuels from participation in relation to any current shares held in ASM is class creating; nor does the disclosure of voting intention by directors have that effect: see generally Wesfarmers at [96]-[98].

As to the explanatory statement, it is provided by way of the scheme booklet. Section 412(1) requires the notice to members convening a scheme meeting to be accompanied by an explanatory statement, explaining the effect of the proposed arrangement, and making prescribed disclosure of matters such as directors' relevant interests. It must also provide any information material to the making of a decision by a member, which has not previously been disclosed.

In this case, the scheme booklet relevantly addresses the reasons why the ASM directors unanimously recommend that members and optionholders vote in favour of the schemes. It includes key information about the scheme meeting, voting, risk factors, Australian taxation considerations, a comparison of Australian, Canadian and US laws, disclosure of the directors interests in shares, options and performance rights and other information the directors consider material. Relevantly, it also attaches a copy of the respective schemes, deed polls, the BDO report and an assurance report from KPMG Transaction Services in relation ASM’s historical financial accounts.

BDO provide the opinion in its report that both the share scheme and the option scheme are fair and reasonable and in the best interests of ASM shareholders and ASM optionholders respectively. The basis for the opinion is provided.

I have reviewed the affidavit evidence to ensure that the matters which must be disclosed have been adequately disclosed (including the prescribed matters referred to in s 412(1)(a) of the Corporations Act and Schedule 8 of the Corporations Regulations) and I consider that is the case. The compliance schedule assisted with this task.

The Practice Note relevantly notes that the appropriate verification of matters in the explanatory statement is an important component of satisfying the Court that it should order that a scheme meeting be convened. The affidavits of Ms Smith and Mr Bhappu provide such evidence.

The final form of the booklet also reflects conferral with ASIC (relevantly disclosed in the second Johnson affidavit).

I am satisfied that taking these things together, the scheme booklet will provide ASM shareholders and ASM optionholders with sufficient information to understand and assess the BDO opinion, and the advantages and disadvantages of the proposed schemes. ASM shareholders and ASM optionholders will have a proper opportunity to make an informed decision about whether to vote in favour of the Schemes. Therefore, it is appropriate to approve the explanatory statement for distribution.

In addition to those matters and relevant to the remaining criteria, senior counsel disclosed various other matters of particular relevance.

The first was to emphasise that the option scheme will not proceed if the share scheme is not given effect. This is made clear in the scheme booklet.

The second is the option granted to current ASM shareholders to receive CDIs or shares. The default position is that if they fail to make an election they will be deemed to have elected to receive CDIs. This provides certainty as to the mechanics of the share scheme

The directors have made prominent disclosure of their personal interests in the scheme booklet. All directors hold shares in the aggregate amount of some 13.91% of issued share capital. All but one hold options, being in the aggregate of some 5.93% of issued options. Ms Smith also holds performance rights, issued pursuant to an ASM performance rights plan, being an equity incentive plan last approved by ASM shareholders on 26 November 2024.

The Board deliberated about the treatment of performance rights under the share scheme in the absence of Ms Smith. The board resolved that it would take steps to ensure that all performance rights currently on issue will vest and be converted into ASM shares before the implementation date for the scheme. It is a condition precedent that all such performance rights must vest or lapse before the scheme record date. The end result for Ms Smith, having regard to the vesting of performance rights, the additional cash payment for consideration of shares that will follow, her current entitlements in terms of share consideration and the potential to receive a retention incentive which includes components beyond remuneration, is that she stands to receive a package of benefits should the scheme proceed. I am satisfied that there has been disclosure of such potential under the scheme booklet.

The ASM board (excluding Ms Smith) resolved that it remained appropriate for Ms Smith to make a recommendation to shareholders. According to her affidavit, Ms Smith, considered that in light of the importance of the proposed schemes, and her central role as managing director and chief executive officer, it was appropriate for her to make a recommendation; she observed that in her experience the absence of a recommendation from the directors of a target company may have significant or unjustified consequences for a proposal that would otherwise benefit shareholders and optionholders. There remain mechanisms for that view to be modified. Ms Smith said that the other four directors individually considered the proposed schemes and reached the same conclusion in resolving that it was appropriate for them to make a recommendation.

The directors unanimously supported the schemes, as disclosed in the scheme booklet.

Ultimately these are all matters for consideration by the shareholders and optionholders, but the scheme booklet properly draws attention to them.

Mr Smith, a non-executive director of ASM, has agreed to serve as chairperson of the share scheme meeting and the option scheme meeting. Ms Lisa Koch, a solicitor and partner of A&O Shearman, has agreed to serve as alternate chairperson if Mr Smith is unavailable.

As noted above, A&O Shearman are the solicitors acting for ASM in the proposed schemes. Ms Smith’s evidence disclosed that no element of A&O Shearman's fee arrangement is tied to implementation of the share scheme or the option scheme, and Ms Koch does not otherwise stand to benefit personally from the implementation of either of the schemes.

Rule 14.4 of ASM’s constitution is relevant. By rule 14.4, if the ASM board has appointed a director to chair board meetings, that director may also chair meetings of members. If that director is not present at the time when a members’ meeting is called, or is not willing to chair the meeting, the voting members present must elect a member or director present to chair the meeting. Consequently, the appointment of Ms Koch, who is neither a member or director, as alternate chair appears to contravene rule 14.4 of ASM’s constitution. However, I accept ASM’s submission that this does not prevent the Court making the orders sought in relation to the alternate chairperson under s 1319 of the Corporations Act.

A meeting convened under s 411(1) of the Corporations Act is not a general meeting but a meeting convened by the Court. In that context, the appointment is made by the Court. The Court’s power, including under s 1319, extends to making orders that would otherwise contravene a company’s constitution; Re Nzuri Copper Ltd; Ex parte Nzuri Copper Ltd [2019] WASC 189 at [79] (Vaughan J); Sienna Cancer Diagnostics Limited, in the matter of Sienna Cancer Diagnostics Limited [2020] FCA 899 at [115] (Moshinsky J).

In these circumstances I see no impediment to the order in relation to Ms Koch being made.

Where communications with shareholders have occurred before a scheme meeting (apart from by the scheme booklet), the Court must be informed before the approval hearing about any relevant matters that have arisen from the manner in which those communications have occurred. As is usual, ASM indicated that it would comply with this obligation and make any necessary disclosure at the approval hearing.

However, in this case there were certain statements or communications and media interviews made prior to the first court hearing that were disclosed to the Court. Those matters included, in particular, statements made by Ms Smith during media interviews that did not address matters relevant to the schemes in a comprehensive manner. For example, in responding to questions in January and March 2026, Ms Smith identified certain conditions precedent but did not refer to the schemes being subject to court approval. Other examples of statements made in January 2026 were set out in the evidence and submissions. Importantly the statements were a considerable period prior to the despatch of the scheme booklet and I accept ASM’s submission that any misapprehension caused by the statements has been remedied by the fulsome disclosure in the scheme booklet.

Importantly, ASM shareholders and ASM optionholders will be given adequate time to review the scheme booklet before having an opportunity to vote at the scheme meetings. Further, shareholders and optionholders are reminded in multiple places to read the scheme booklet carefully and in its entirety: see generally Essential Metals Limited, in the matter of Essential Metals Limited [2023] FCA 240 at [103]; DDH1 Limited, in the matter of DDH1 Limited [2023] FCA 982 at [22], [50]-[51] (Colvin J); and Talon Energy Ltd, in the matter of Talon Energy Ltd [2023] FCA 1362 at [29] (Jackson J).

Ultimately, whilst this disclosure is recorded at this point, whether material communications or information provided to shareholders outside the scheme booklet have compromised the integrity of the scheme meeting will be assessed by the Court at the approval hearing: Seven Network Ltd, in the matter of Seven Network Limited (No 2) [2010] FCA 355 at [20] (Jacobson J).

As to performance risk, each of Energy Fuels and EFR has agreed to execute a deed poll in favour of the scheme shareholders (in the case of the share scheme) and the scheme optionholders (in the case of the option scheme), covenanting to perform the obligations attributed to it under the relevant scheme.

The proposed schemes include standard ‘deemed warranty’ and ‘no encumbrance’ provisions.

The scheme implementation deed includes the kind of exclusivity provisions that are considered market standard (the exclusivity period runs from 21 January 2026 (the date of the original scheme implementation deed) until the earlier of (a) the date of its termination; (b) 31 August 2026, being the end date; or (c) the date when the share scheme becomes effective. There is a reciprocal break fee. Prominence is given to the break fees in the scheme booklet. The break fee is equal to approximately 0.8% of ASM’s implied equity value and does not exceed the 1% guideline noted in Takeovers Panel Guidance Note 7. I do not consider these provisions to be unduly restrictive such that they might otherwise undermine the fairness of the schemes generally.

For completeness, ASM, EFR and Energy Fuels gave notice to the Court of an intention to rely upon the US Securities Act for an exemption in relation to the scheme consideration. This matter will otherwise be addressed at the second court hearing, in accordance with the approach taken in other schemes: see generally Allkem Limited, in the matter of Allkem Limited (No 2) [2023] FCA 1657 at [33]-[38]; Amaero Ltd, in the matter of Amaero Ltd [2026] FCA 596 at [27]-[30] (Owens J).

The evidence established that ASM’s legal representatives communicated with ASIC in relation to the content of the explanatory statement (by way of the draft scheme booklet), having particular regard to the nature of the proposed schemes. Relevantly, as to the option scheme, ASIC provided dispensation from the requirement that the explanatory statement provide certain information otherwise required by paras 8201(a), (b), (c), (d) and (e) and paras 8203(a) and (b) of Pt 2 of Sch 8 to the Corporations Regulations. As to the share scheme, ASIC waived the requirement that the explanatory statement state the matters required by para 8302(h) of Pt 3 of Sch 8 to the Corporations Regulations. Such dispensation and waiver were provided on terms. ASIC otherwise provided the standard letter to the effect that it has had a reasonable opportunity to consider the proposed schemes and that it did not seek to appear or make submissions at the first court hearing.

Procedural dispensations that were requested, including as to the manner of advertising, were conventional and there was no reason to withhold dispensation or refuse other standard ancillary relief. Having regard to the ASIC dispensations and waivers that were secured, the procedural requirements have otherwise been met.

Senior counsel appeared with leave for EFR as an interested party, and supported the making of the orders sought by ASM.

There is nothing to suggest that the proposed schemes are other than bona fide and properly proposed. In my view the share scheme and option scheme, if considered and adopted by the ASM shareholders and ASM optionholders, are of such a nature that in the absence of opposition they would likely be approved at the second court hearing.

Accordingly, orders were made at the conclusion of the hearing convening the meetings.