Lessons Learnt From Take Private Transactions

There have recently been a number of matters involving businesses with a presence in the People’s Republic of China (“PRC”) whose management has successfully taken the Cayman Islands holding company private through the Cayman Islands merger provisions, often with a view to relisting on the Hong Kong or PRC exchanges.

These merger provisions, introduced in amendments to the Companies Law (“Law”) in 2009 and then amended in 2011, provide a mechanism by which Cayman Islands companies listed on some foreign stock exchanges can be taken private. The merger regime avoids the need for 100% investor consent or a scheme of arrangement requiring both approval of the Grand Court of the Cayman Islands (“Court”) and 75% in number and a majority in value of investors of those present and voting (in person or by proxy) at a meeting convened at the direction of the Court. The default threshold for approval for a merger is a minimum of two thirds of the votes cast at a quorate meeting of voting shareholders, though the Artices of Association (“Articles”) may specify a higher threshold for approval and/or additional consent requirements.

Recent decisions of the Court have confirmed many of the practices and procedures that we would encourage clients to adopt, and we summarise here some of the practical considerations when contemplating a transaction of this nature.

 

Click to view bulletin


CAYMAN ISLANDS
Rupert BellPartnerT +1 345 914 4203rupert.bell@walkersglobal.com
Matthew GouckePartnerT +1 345 914 6332matthew.goucke@walkersglobal.com
Barnaby GowriePartnerT +1 345 914 6365barnaby.gowrie@walkersglobal.com
Neil LuptonPartnerT +1 345 914 4286neil.lupton@walkersglobal.com
Colette WilkinsPartnerT +1 345 914 4215colette.wilkins@walkersglobal.com

DUBAI
Barnaby GowriePartnerT +1 345 914 6365barnaby.gowrie@walkersglobal.com

HONG KONG
Joanne CollettPartnerT +852 2596 3354joanne.collett@walkersglobal.com

JERSEY
Fraser HernGroup Partner*T +44 (0) 1534 700 780fraser.hern@walkersglobal.com

LONDON
John O'DriscollPartnerT +44 (0)20 7220 4987john.o'driscoll@walkersglobal.com
Fraser HernGroup Partner*T +44 (0) 1534 700 780fraser.hern@walkersglobal.com

SINGAPORE
Robert FootePartnerT +65 6603 1695robert.foote@walkersglobal.com