UK: schemes of arrangement, certainty and the Takeover Code

In Re Expro International Group plc [2008] EWHC 1543 (Ch), the High Court considered an application for sanction of a scheme of arrangement under Part 26 of the Companies Act (2006).  The scheme's purpose was a takeover. The UK Takeover Code provides, in appendix 7, that its provisions "apply to an offer effected by means of a scheme of arrangement in the same way as they apply to an offer effected by means of a contractual offer".  Re Expro is an important case because of the trial judge's observations regarding the application of the Takeover Code and the role of the Panel in takeovers effected through a scheme of arrangement.  The trial judge, David Richards J., observed (at para. [55]):

I have approached this application by the shareholders ... entirely on its own merits and in accordance with the established principles applicable to the consideration of schemes of arrangement. I nonetheless should say that I have concern that there should, if possible, be a common approach to the conduct of bids, whether they are structured as an offer or as a scheme. I would not think it desirable that the court procedure involved in a scheme should allow in an undesirable level of uncertainty which the provisions of the Code have successfully reduced or eliminated in the case of ordinary offers" 

Notes:

[a] The judgment has not yet been published on BAILII although it is available on Lawtel (a subscription service).  Update (10 July 2008): the decision is now available on BAILII - see here. 

[b] The decision has been widely reported in the business press: see here and here.