Gantry Acquisition Corp v Parker & Parsley Petroleum Australia Pty Ltd

(1994) 51 FCR 554

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Gantry Acquisition Corp
vParker & Parsley Petroleum Australia Pty Ltd

Court:

Judges: Sheppard J
Burchett J
Beazley J

Subject References:
Corporations
Takeovers
Whether Pt A statement deficient
Whether failure to set out particulars of offeror's intentions regarding continuation of business of target company
Whether breaches es-tablished
Consideration of proper approach to construction of Corporations Law provisions
Corporations Law ss 698, 731, 739, 743, 750

Legislative References:
Corporations Law - s 698; s 731; s 739; s 743; s 750

Case References:
Samic Ltd v Metals Exploration Ltd - (1993) 60 SASR 300
Sagasco Amadeus Pty Ltd v Magellan Petroleum Australia Ltd - (1993) 177 CLR 508; 113 ALR 23
ICAL Ltd v County Natwest Securities Australia Ltd & Transfield (Ship Building) Pty Ltd - (1988) 6 ACLC 467
Associated Dairies Ltd v Central Western Dairy Ltd - (1993) 11 ACLC 827
Fitzgerald-Hart v Attorney-General - [1985] 3 All ER 455
Re Paddle River Construction Ltd - (1961) 35 WWR 605
A v B - [1969] NZLR 534
Bond Corp Holdings Ltd v Sulan - [1990] 3 WAR 49
Re Karounos Ex parte Official Trustee in Bankruptcy - (1989) 89 ALR 580
Jolly v District Council of Yorketown - (1968) 119 CLR 347
House v R - (1936) 55 CLR 499
Neil v Nott - (1994) 121 ALR 148

Hearing date: 4 July 1994
Judgment date: 20 July 1994

Sydney

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Order

(1)

The appeal be dismissed.

(2)

The appellant pay to the respondent its costs of the appeal.

Solicitors for the appellant: Clayton Utz .
Solicitors for the respondent: Mallesons Stephen Jaques .

The order of the primary judge had been to restrain the appellant from sending a Pt A statement to any shareholder of Bridge Oil Ltd, nor otherwise proceeding with any offer to which the Pt A statement related. The primary judge found that the Pt A statement offended s 750(20) of the Corporations Law by failing to adequately state the offeror's intentions regarding the future operation of the business conducted in Australia by Bridge Oil, including the employment future of its employees, and the business and employment prospects of its subsidiaries.

Held , by majority, dismissing the appeal:

Per Sheppard and Burchett JJ (Beazley J dissenting):

(i)

It was necessary to be guarded as regards intentions where the company is not under the control of the offeror.

Consideration of the proper manner in which adequate particulars may be provided, having regard to s 750(20).

(ii)

However, the statement was deficient in its reference to the intended sale of a royalty interest in certain South Texas oil and gas leases for a purchase price of US$60 million. The relevant paragraph suggested that there existed an agreement or arrangement pursuant to which the sale was to be effected, but failed to particularise such agreement or arrangement. Nor did it explain the nature of partnerships referred to in the paragraph, nor a definition of the subject leases. Furthermore, there was no indication of what was intended to be done with the US$60 million when it was received.

(iii)

The foregoing paragraph offended s 750(20) and also cl 17 which requires the Pt A statement to set out any other information material to the making of a decision by an offeree whether or not to accept an offer.

Per curiam :

(iv)

Consideration of general principles to be applied in the provision of adequate particulars when compiling Pt A statements. The object is to put shareholders in possession of the information required to enable them to make an informed and critical assessment of the offer and an informed decision whether to accept it.

Samic Ltd v Metals Exploration Ltd (1993) 60 SASR 300, applied

Appeal

This was an appeal from a decision of a single judge of the Federal Court of Australia to a Full Court of that court. The facts are set out in the judgment of Sheppard J.

P G Hely QC and A J Meagher for the appellant.
S D Rares SC and A C Bennett for the respondent.