Rebel Sport Limited, in the matter of Rebel Sport Limited [2007] FCA 96 (6 February 2007)

Last Updated: 14 February 2007

FEDERAL COURT OF AUSTRALIA

Rebel Sport Limited, in the matter of Rebel Sport Limited
[2007] FCA 96

IN THE MATTER OF REBEL SPORT LIMITED (ACN 003 382 823)

NSD 90 of 2007

LINDGREN J
6 FEBRUARY 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 90 OF 2007

IN THE MATTER OF REBEL SPORT LIMITED (ACN 003 283 823)

BETWEEN:	REBEL SPORT LIMITED (ACN 003 283 823) Plaintiff
JUDGE:	LINDGREN J
DATE OF ORDER:	6 FEBRUARY 2007
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. Pursuant to subsection 411(1) of the Corporations Act 2001 (Cth):

(a) the Plaintiff, Rebel Sport Limited (‘Rebel’), convene a meeting (‘Scheme Meeting’) of the holders of ordinary shares in Rebel (other than Excluded Shareholders, being Foghorn Pty Limited and its related bodies corporate) (‘Rebel Shareholders’) for the purpose of considering and, if thought fit, approving a scheme of arrangement (with or without modification) proposed to be made between Rebel and the Rebel Shareholders (‘the Scheme’), the terms of which are contained in section 9 of the Scheme Booklet, which is Exhibit ‘KLB12’ to the affidavit sworn by Karen Louise Bozic on 5 February 2007 in this proceeding (‘Scheme Booklet’);
(b) the Scheme Meeting be held at 10.00 am (Sydney Time) on Thursday, 15 March 2007 at the Menzies Hotel, 14 Carrington Street, Sydney, New South Wales;
(c) Gerald Harvey or, failing him, Christopher Herbert Brown, or failing both, any other non-executive director of Rebel, act as chairman of the Scheme Meeting;
(d) the chairman have the power to adjourn the scheme meeting for such time as the chairman considers appropriate;
(e) at the Scheme Meeting, Rebel Shareholders be entitled to one vote for each Rebel share they are registered as holding at 10.00 am on 13 March 2007;

(f) the Explanatory Statement constituted by the Scheme Booklet be approved;

(g) on or before 13 February 2007, there be dispatched to Rebel Shareholders who are registered as holding Rebel Shares as at the close of business on 9 February 2007 by prepaid post addressed to the relevant addresses set out in the Rebel register of members; or personally served:
(i) a document substantially in the form of the Scheme Booklet;
(ii) a proxy form for the Scheme Meeting; and
(iii) an envelope addressed to Registries Limited;
(h) the time by which the Rebel Shareholders must return their proxy forms for the Scheme Meeting be 10.00 am (Sydney time) on 13 March 2007; and
(i) the proposed ASX announcement in terms of paragraph 2 of the second affidavit of Karen Louise Bozic sworn on 5 February 2007 be approved, as a matter of form of the announcement.

2. Rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) shall not apply to the Scheme Meeting, except in so far as that rule applies Regulation 5.6.13 of the Corporations Regulations 2001 (Cth).
3. Notice of the hearing of application for an order approving the proposed Scheme be published once in the The Sydney Morning Herald newspaper by an advertisement substantially in the form of ‘Annexure A’ to these Orders, such advertisement to be published on or before 10 March 2007.

4. The proceedings be stood over to 9.15 am on 19 March 2007.

5. The plaintiff have liberty to apply on 24 hours’ notice.

6. These orders be entered forthwith.






















Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 90 OF 2007

IN THE MATTER OF REBEL SPORT LIMITED (ACN 003 283 823)

BETWEEN:

REBEL SPORT LIMITED (ACN 003 283 823) Plaintiff

JUDGE:	LINDGREN J
DATE:	6 FEBRUARY 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION

1 The plaintiff (‘Rebel’) applies at this first court hearing for an order under s 411(1) of the Corporations Act 2001 (Cth) (‘the Act’) that Rebel convene a meeting of its members other than ‘Excluded Shareholders’ (referred to below) (‘the Scheme Shareholders’) to consider, and if thought fit, to pass a resolution agreeing to a scheme of arrangement (‘the Scheme’) between them and Rebel. If the resolution is duly passed, Rebel will seek on the second court hearing orders pursuant to ss 411(4)(b) and 411(12), approving the Scheme.

2 The purpose of the Scheme is to facilitate an acquisition by Foghorn Holdings Pty Limited (‘Foghorn’), a wholly owned subsidiary of Archer Capital Pty Limited (‘Archer’), of the whole of the issued capital in Rebel for a cash consideration of $4.60 per share. The Excluded Shareholders are Foghorn and shareholders associated with Foghorn.

OUTLINE OF FACTS

3 Rebel was incorporated on 30 April 1987 and changed its name to ‘Rebel Sports Pty Limited’ on 3 December 1987, and converted to a public company with its present name ‘Rebel Sport Limited’, on 3 November 1993. Rebel is listed on the Australian Stock Exchange (‘ASX’), and its ordinary shares are quoted for trading on the ASX.

4 On 20 December 2006 Rebel entered into a scheme implementation agreement with Archer and Foghorn. On the same day, Rebel advised the ASX of that fact. The agreement was amended on 5 February 2007.

5 Rebel operates 63 stores across Australia in every state and territory, with the exception of Tasmania and the Northern Territory. Most of the Rebel stores are located in shopping centres. According to an affidavit of Karen Louise Bozic, a director of Rebel, Rebel has three key merchandise categories, namely, footwear, apparel and equipment, and Rebel is a ‘retailer of sport and leisure, fashion and performance products’.

6 Rebel has a 40 percent shareholding in Next Athleisure Pty Limited which operates the ‘Glue’ store network. There are 10 Glue stores in New South Wales and Victoria. The Glue business is that of fashion retailer.

7 Rebel has a 51 percent interest in Sportz Australasia Pty Ltd, which is a wholesaler of bicycles, bicycle apparel, footwear, bicycle parts and accessories. It sells to Rebel as well as to independent bicycle dealers.

8 Rebel’s share capital comprises 80,260,043 shares, of which Becto Pty Ltd (‘Becto’) owns 42,389,565, representing 52.82 percent of the issued shares in Rebel. Becto is a wholly owned subsidiary of Harvey Norman Holdings Ltd.

9 There are eight directors of Rebel. The chairman of directors is Gerald Harvey, who is also the chairman of directors of Harvey Norman Holdings Ltd. Two of the eight directors are executive directors, namely, Ms Bozic and Stephen Michael Heath.

10 In addition to the share capital, Rebel has issued 350,000 performance rights and 960,000 options. If all of these were to be exercised, the result would be the issue of a further 1,310,000 shares in Rebel. The performance rights are held by Mr Heath (300,000) and Ms Bozic (50,000). The options are held by Craig Fisher, the financial controller of Rebel (60,000), Mr Heath (400,000) and Ms Bozic (500,000).

11 It is proposed that Foghorn will enter into separate agreements with the holders of the performance rights and options, under which, once the Scheme becomes effective, Foghorn will either purchase all of those rights and options or procure the cancellation of them, and will pay the holders an amount of $4.60 per right or option, less the amount payable by the holder in order to exercise the right or option.

12 There is in evidence an affidavit of David John Kenney, a director of Hall Chadwick Corporate (NSW) Limited, who has also been a partner of Hall Chadwick Chartered Accountants & Business Advisers (NSW) since 1 February 1999. Mr Kenney has provided a report in which he expresses the opinion that the Scheme is ‘fair and reasonable and in the best interests of Rebel shareholders’.

13 Foghorn has executed a deed poll in favour of the Scheme Shareholders by which Foghorn undertakes, if the Scheme is agreed to by them and approved by the Court, to provide the consideration of $4.60 per share before the transfer of the shares is effected in the register of Rebel.

14 It is proposed that the meeting of the Scheme Shareholders will be held on 15 March 2007 and that, if they agree to the Scheme, the second court hearing will take place on 19 March 2007 at 9.15 am.

15 There is in evidence a ‘Scheme Booklet’ which will satisfy the requirement in relation to the supply of an ‘explanatory statement’ contained in s 412 of the Act.

16 I think that Scheme Shareholders should have the opportunity of considering the Scheme.

CONCLUSION

17 For the above reasons, there will be orders for the convening of the meeting of the Scheme Shareholders.

I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Associate:

Dated: 13 February 2007

Counsel for the Plaintiff:	Mr R G Forster SC and Mr J Emmett
Solicitors for the Plaintiff:	Brown Wright Stein
Counsel for Foghorn Holdings Pty Ltd	Mr F Gleeson SC
Solicitors for Forhorn Holdings Pty Ltd	Freehills
Date of Hearing:	6 February 2007
Date of Judgment:	6 February 2007