Jardine Strategic Ltd (Appellant) v Oasis Investments II Master Fund Ltd and 80 others (Respondents) (Bermuda)

Hearing listed

Case summary
Appeal
Change log

Case summary

Case ID

JCPC/2024/0009

Jurisdiction

Bermuda

Parties

Appellant(s)

Jardine Strategic Ltd

Respondent(s)

(1) Oasis Investments II Master Fund Ltd, (2) Attestor Value Master Fund LP

(1) Maso Capital Investments Ltd, (2) Blackwell Partners LLC - Series A, (3) Star V Partners LLC

(1) The Gabelli Small Cap Growth Fund (2) The Gabelli Equity Income Fund, (3) The Gabelli Asset Fund

(4) Gabelli Associates Ltd, (5) Gabelli Associates Fund, (6) Gabelli Associates Ltd IIE,

(7) The Gabelli Multimedia Trust Inc., (8) GGCP, Inc., (9) Gabelli Associates Fund II

Issue

Did the Court of Appeal err in refusing to strike out fair value appraisal claims by parties that had acquired shares with the knowledge that the company would shortly be amalgamated into another company, and what is the proper approach to identifying fair value?

Facts

The appellant, Jardine Strategic Limited (the “Company”), is a company within the Jardine Matheson group of companies, of which the ultimate parent company is Jardine Matheson Holdings Limited (“Jardine Matheson”). The Company was formed by an amalgamation between Jardine Strategic Limited and JMH Bermuda Limited (the “Amalgamation”). Prior to the Amalgamation, Jardine Matheson held, directly or indirectly, 84.9% of the shares in Jardine Strategic. On 8 March 2021, it was announced that Jardine Strategic and Jardine Matheson had agreed a cash acquisition for the 15% of share capital in Jardine Strategic that Jardine Matheson did not already own (the “Announcement”). The Announcement explained that the acquisition would be implemented the Amalgamation pursuant to section 106 of the Companies Act 1981 (the “1981 Act"), that a general meeting of Jardine Strategic would be convened to consider and vote on the Amalgamation, and that shareholders in Jardine Strategic would be entitled to receive USD $33 in cash for each ordinary share held. The Announcement also noted that the Amalgamation required the approval of at least 75% of the votes cast by shareholders in Jardine Strategic, and because Jardine Matheson had undertaken to Jardine Strategic that it would vote in favour of the resolution, the requisite approval was certain to be secured. On 17 March 2021, the board of Jardine Strategic gave notice (the “Notice") to its shareholders pursuant to section 106(2) of the 1981 Act of a special general meeting to be held on 12 April 2021 to consider and, if thought fit, pass a resolution approving the Amalgamation. The Notice confirmed that the fair value of the shares had been determined by Jardine Strategic to be USD $33 per share. Following the Announcement, and more particularly following the Notice, several funds acquired interests in the shares of Jardine Strategic at an average price, according to the Company, of USD $33.66. At the meeting of 12 April 2021, the resolution approving the Amalgamation was passed. Then, on 14 April 2021, the Amalgamation became effective, and Jardine Strategic and JMH Bermuda continued as the Company. Between 12 and 15 April 2021, eighteen originating summons were filed in relation to the Amalgamation, in which the respondents sought determination of the fair value of their shares in Jardine Strategic. A number of the respondents are parties that acquired their shares after the Notice was provided. Jardine Strategic and the Company applied to strike out the appraisal claims by parties that had acquired shares with the knowledge that the Amalgamation was a foregone conclusion, and who acquired their shares as an arbitrage opportunity. This application was dismissed by the Supreme Court of the Bahamas. The appellants appealed to the Court of Appeal for the Bahamas, which dismissed the appeal. The appellant now appeals to the Judicial Committee of the Privy Council.