Representation by Beazley Plc

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: Bailiff
• Judgment Date: 24 June 2016
• Neutral Citation: [2016] JRC 109
• Date: 24 June 2016

[2016] JRC 109

ROYAL COURT

(Samedi)

Before:

T. J. Le Cocq, Esq., Deputy Bailiff, and Jurats Marett-Crosby and Grime

In the Matter of Representation by Beazley Plc

And in the Matter of Articles 63 and 125 of the Companies (Jersey) Law 1991

Advocate J. Harvey-Hills for the Representor.

Authorities

Companies (Jersey) Law 1991.

Companies Act 2006.

Representation of CPA [2010] JRC 011 .

Representation of Informa Plc [2014] JRC 120C .

Representation of Henderson Far East Income Limited [2007] JRC 015 .

United States Securities Act 1933.

Companies — application to the court to sanction scheme of arrangement and application to reduce capital.

Bailiff

THE DEPUTY

1 This is an application brought by Beazley Plc (“Beazley”) to sanction a Scheme of Arrangement dated 25 ^th February, 2016, (“the Scheme”) between Beazley and the holders of the Scheme shares pursuant to Article 125 of the Companies (Jersey) Law 1991 (“the Law”). There is also a linked application to reduce capital.

2 The matter was first before the Court for directions on 22 ^nd February, 2016, at which time the Court ordered that Beazley be at liberty to convene a Court meeting pursuant to Article 125(1) of the Law for the purposes of considering and if thought fit approving the Scheme (“the Court Meeting”). Further orders were made concerning the timing and location of that meeting, relating to the notification of shareholders, proxies, and the reporting back to the Court of the results of the meeting.

3 The Court Meeting has now been held and the matter returns before us to consider whether or not the Scheme should be sanctioned and the associated reduction of capital of Beazley confirmed.

4 Essentially the purpose of the Scheme is to restructure a group of companies currently held under the umbrella of Beazley as holding company, by creating a new holding company (New Beazley) incorporated in England and Wales and resident for tax purposes in the United Kingdom to hold that group. New Beazley was incorporated and registered in England and Wales on 4 ^th September, 2015, pursuant to the Companies Act 2006 and if the Scheme is sanctioned the ultimate result would be that New Beazley will become the holding company, the shares in Beazley will be cancelled, and all shareholders in Beazley will receive in place of the cancelled Beazley shares an equivalent number of shares in New Beazley. Beazley will thereafter be a wholly owned subsidiary of New Beazley.

5 There are three stages in the process by which a Scheme of Arrangement under Article 125 of the Law becomes binding upon its shareholders. The stages are usefully summarised in the matter of Representation of CPA [2010] JRC 011 in the following terms:-

“(i) First there is an application under Article 125(1) for an order that a meeting of shareholders or creditors if necessary be called. It is at this stage that the Court should consider whether or not to summon separate class meetings and if so, who should be summoned to each meeting. The Court will not look at the merits at this stage (See Re Telewest Communications Plc [2004] EWHC 92 ).

(ii) Second, the scheme proposals are put to the court-convened meeting and are approved by a majority by number representing 3/4ths of the voting rights of members present and voting in person or by proxy .

(iii) Third, and assuming the requisite approval at such meeting is given, the Court exercises its discretion as to whether to sanction the arrangement: see Re National Bank Ltd [1966] 1 All ER 1006 at 1012 approved by the Royal Court in Re Telewest Finance (Jersey) Limited [2004] JRC 109 .”

6 The Court further stated in connection with the facts of that case:-

“There is also in effect a fourth stage to this scheme. As there is an associated reduction of capital, which the scheme is conditional upon, the Court will be requested to make an order sanctioning the reduction of capital.”

7 At the hearing on 25 ^th February, 2016, the Court made the order pursuant to Article 125(1) and specified that there need be a single meeting of the holders of Beazley shares for the purpose of...