Law: Companies Ordinance, 1984

Section: 287,284

(a) Companies Ordinance (XLVII of 1984)--S.287 Amalgamation/merger of companies Fair value of shares Determining factors As a general rule in scheme of merger, break up value, dividend earning capacity and market value of shares, are the three factors which are relevant for determining the fair value of shares for purpose of determining a swap ratio. (b) Companies Ordinance (XLVII of 1984) Ss. 284 & 287 Amalgamation/merger of companies ¬Fair value of shares, determination of Methodology adopted for determining fair value of shares in other schemes of merger Application Such general rule could not by definition be made applicable to .ail schemes of merger Special circumstances might justify an exception being made to the general rule. (c) Companies Ordinance XLVII of 1984) Ss. 284 & 288 Amalgamation/merger of companies--Approval of scheme Jurisdiction of Court Scope Directors of the companies seeking merger have to propose the scheme, which have to be approved by their shareholders, brut such general rule is subject to certain important caveats Court is not a by stander obliged to grant approval to all schemes of arrangement approved by special majority of shareholders specified in S.284 of the Ordinance Court can review proposed scheme and decline approval though approved by requisite majority Proposed scheme will have effect only if sanctioned by Court, but before passing such order. Registrar has a statutory right of being heard. (d) Companies Ordinance (XLVII of 1984) S.284 Sanction of scheme for amalgamation/ merger of companies Jurisdiction of Court Scope Scheme approved by 3/4th majority of shareholders Court would not approve such scheme, where the majority shareholders of a company had voted in a manner coercive or oppressive to the minority or where the majority shareholders had not voted in the interest of the shareholders as a class. (e) Companies Ordinance (XLVIl of 1984) S.284 Sanction for amalgamation/merger of companies ¬Duty of Court Scope Scheme unfair or unconscionable and materially objected to by shareholders either in general meeting or before the Court Duty of Court not to approve such scheme Fact that objecting shareholders…

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