Weinstock v Beck

REASONS FOR JUDGMENT 1 Application has been made by the plaintiff ("Viculus"), a public company incorporated in Australia, for an order under s 1332(4)(d) of the Corporations Act 2001 (Cth) ("Corporations Act") that the time provided for Viculus to satisfy a bid condition of its takeover bid for Euro Petroleum Ltd ("Euro") be extended to 31 July 2015 and a declaration that the bid condition is satisfied. For the reasons that follow the order and declaration should be made.

facts 2 Viculus has been listed on the official list of the ASX since 27 October 1997. Currently the company is suspended from trading on the ASX because it does not carry on any business activities and holds no business assets. In order to be readmitted to the official list of the ASX, Viculus is required to acquire a business or assets which would enable Viculus to meet the admission requirements under Chapters 1 and 2 of the ASX Listing Rules. 3 On 11 February 2014, Viculus entered into a Heads of Agreement with Euro, an unlisted public company incorporated in Australia. Under the terms of the Heads of Agreement, it was agreed that Viculus would make an off-market takeover bid pursuant to Chapter 6 of the Corporations Act for all the issued shares in Euro ("the Takeover Bid"). In return, the board of Euro would recommend the Takeover Bid to all Euro shareholders. 4 On 1 August 2014, Viculus issued its Bidder's Statement in connection with the Takeover Bid. The Bidder's Statement contained nine conditions that needed to be satisfied or waived in order for the Takeover Bid to proceed. The conditions included Condition (e) as follows: Viculus satisfactorily complying with the re admission requirements of Chapters 1 & 2 of the ASX Listing Rules and being granted in principle approval to re list on the ASX, including meeting the Minimum Subscription amount under this Prospectus. 5 The Minimum Subscription amount under the Prospectus was $3.5 million. 6 The Takeover Bid closed on 15 July 2015. By 15 July 2015, Viculus had received approximately 96.45% acceptance of the Takeover Bid from Euro shareholders and had received subscriptions totalling $3.85 million. 7 On 8 July 2015, Viculus released to the ASX and served on Euro a notice pursuant to s 630(4) of the Corporations Act of the conditions that had been fulfilled. On the same date, Viculus released to the ASX and served on Euro a notice pursuant to s 630(3) of the Corporations Act that the offer was free of all defeating conditions, save for three conditions. One of those conditions was Condition (e). 8 Viculus believed, based on all the steps and actions to date and communications with the ASX, that all the conditions were satisfied as at 15 July 2015, including the ASX in principle approval to relist on the ASX. On 17 July 2015, Viculus lodged with ASIC and the ASX a Notice of Compulsory Acquisition pursuant to s 661A of the Corporations Act. 9 By letter dated 21 July 2015, the ASX confirmed that it could see no reason why the securities of Viculus should not be reinstated to official quotation following compliance with Listing Rule 11.1 and Chapters 1 and 2 of the Listing Rules (subject to completion of certain pre-admission steps and conditions). 10 On 22 July 2015, Viculus issued an announcement to the ASX stating, amongst other things, that a Notice of Compulsory Acquisition for the remaining shares in Euro had been issued, Viculus had received subscriptions for a total of $3.85 million under the Prospectus and Viculus had received formal correspondence from the ASX stating that, subject to certain conditions and compliance with Listing Rule 11.1 and Chapters 1 and 2 of the Listing Rules, the ASX saw no reason why the shares in Viculus should not be reinstated to official quotation. 11 On 24 July 2015, representatives of ASIC contacted Viculus' lawyer, Mr Burrell, expressing concern that Condition (e) of the Takeover Bid had not been satisfied as at 15 July 2015, the date by which that approval needed to be given under the Bidder's Statement. If the condition was not satisfied, the Takeover Bid is void by force of s 650G of the Corporations Act. 12 In order to address ASIC's concern, Viculus obtained a further letter from the ASX dated 31 July 2015 in which the ASX states that: ASX confirms that subject to [Viculus] obtaining any and all Court Orders necessary for it to be able to satisfy condition 7 of the ASX Letter, [Viculus] will be compliant with listing rule 11.1 and chapters 1 and 2 of the Listing Rules and its securities can be reinstated to official quotation. 13 Viculus now makes application under s 1322(4)(d) of the Corporations Act to have the time by which Viculus was required to obtain ASX's "in principle" approval to relist on the ASX extended from 15 July 2015 to 31 July 2015. A letter dated 3 August 2015 from ASIC was produced to the Court in which ASIC advised that it did not oppose the orders sought and did not intend to appear at the hearing of the matter. Also on 3 August 2015 Viculus made an announcement to the ASX that it had made the application to the Federal Court and that members of the public, including shareholders of the company, may attend the hearing. No shareholder attended.