Rebel Sport Limited, in the matter of Rebel Sport Limited [2007] FCA 96

OUTLINE OF FACTS 3 Rebel was incorporated on 30 April 1987 and changed its name to 'Rebel Sports Pty Limited' on 3 December 1987, and converted to a public company with its present name 'Rebel Sport Limited', on 3 November 1993. Rebel is listed on the Australian Stock Exchange ('ASX'), and its ordinary shares are quoted for trading on the ASX. 4 On 20 December 2006 Rebel entered into a scheme implementation agreement with Archer and Foghorn. On the same day, Rebel advised the ASX of that fact. The agreement was amended on 5 February 2007. 5 Rebel operates 63 stores across Australia in every state and territory, with the exception of Tasmania and the Northern Territory. Most of the Rebel stores are located in shopping centres. According to an affidavit of Karen Louise Bozic, a director of Rebel, Rebel has three key merchandise categories, namely, footwear, apparel and equipment, and Rebel is a 'retailer of sport and leisure, fashion and performance products'. 6 Rebel has a 40 percent shareholding in Next Athleisure Pty Limited which operates the 'Glue' store network. There are 10 Glue stores in New South Wales and Victoria. The Glue business is that of fashion retailer. 7 Rebel has a 51 percent interest in Sportz Australasia Pty Ltd, which is a wholesaler of bicycles, bicycle apparel, footwear, bicycle parts and accessories. It sells to Rebel as well as to independent bicycle dealers. 8 Rebel's share capital comprises 80,260,043 shares, of which Becto Pty Ltd ('Becto') owns 42,389,565, representing 52.82 percent of the issued shares in Rebel. Becto is a wholly owned subsidiary of Harvey Norman Holdings Ltd. 9 There are eight directors of Rebel. The chairman of directors is Gerald Harvey, who is also the chairman of directors of Harvey Norman Holdings Ltd. Two of the eight directors are executive directors, namely, Ms Bozic and Stephen Michael Heath. 10 In addition to the share capital, Rebel has issued 350,000 performance rights and 960,000 options. If all of these were to be exercised, the result would be the issue of a further 1,310,000 shares in Rebel. The performance rights are held by Mr Heath (300,000) and Ms Bozic (50,000). The options are held by Craig Fisher, the financial controller of Rebel (60,000), Mr Heath (400,000) and Ms Bozic (500,000). 11 It is proposed that Foghorn will enter into separate agreements with the holders of the performance rights and options, under which, once the Scheme becomes effective, Foghorn will either purchase all of those rights and options or procure the cancellation of them, and will pay the holders an amount of $4.60 per right or option, less the amount payable by the holder in order to exercise the right or option. 12 There is in evidence an affidavit of David John Kenney, a director of Hall Chadwick Corporate (NSW) Limited, who has also been a partner of Hall Chadwick Chartered Accountants & Business Advisers (NSW) since 1 February 1999. Mr Kenney has provided a report in which he expresses the opinion that the Scheme is 'fair and reasonable and in the best interests of Rebel shareholders'. 13 Foghorn has executed a deed poll in favour of the Scheme Shareholders by which Foghorn undertakes, if the Scheme is agreed to by them and approved by the Court, to provide the consideration of $4.60 per share before the transfer of the shares is effected in the register of Rebel. 14 It is proposed that the meeting of the Scheme Shareholders will be held on 15 March 2007 and that, if they agree to the Scheme, the second court hearing will take place on 19 March 2007 at 9.15 am. 15 There is in evidence a 'Scheme Booklet' which will satisfy the requirement in relation to the supply of an 'explanatory statement' contained in s 412 of the Act. 16 I think that Scheme Shareholders should have the opportunity of considering the Scheme. CONCLUSION 17 For the above reasons, there will be orders for the convening of the meeting of the Scheme Shareholders. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.