Only four directors could buy shares in the acquirer's parent company
The Federal Court ordered a company's four founders to vote separately from other shareholders because only they could buy shares in the buyer's parent.
The court made the orders on 18 August 2026 in Planet Innovation Holdings Ltd, in the matter of Planet Innovation Holdings Ltd [2026] FCA 1194. Under s. 411(1) of the Corporations Act 2001 (Cth) (the Act), it called two shareholder meetings to consider a scheme of arrangement, a court-approved way to acquire a company.
If implemented, the scheme would transfer to Meiban Innovation (Melbourne) Pty Ltd (Meiban) every Planet Innovation Holdings Ltd (Planet Innovation) share it did not already own. Meiban, an indirect subsidiary of Singapore's Meiban United Pte. Ltd (Meiban United), held 19.9 percent of the unlisted company and offered other shareholders $1.60 in cash per share, a total of $116,890,523.
The court called separate meetings for general shareholders and for the company's four founders because only they could buy shares in Meiban United for $2 million each, $8 million in total. All four were executive directors who together held 33.38 percent of Planet Innovation, and the court placed them in their own voting group.
The court found that the arrangement looked like earlier deals where senior managers reinvested in the buyer, but set this one apart on size. The founders' $8 million was a much larger share of the deal, and the court held that it justified separating them.
On funding, the court accepted the plan despite gaps. Meiban was a new company with no trading history, and its parent did not directly promise shareholders it would pay. Planet Innovation could not enforce a related support commitment of at least $33 million. The court held that the buyer's conditional loan finance could wait for the second hearing, and that the funding still gave shareholders a sound basis to weigh the deal.
An independent expert, Moore Australia (Vic) Pty Ltd, valued each share at between $2.25 and $2.48, above the $1.60 offer. It still backed the deal as reasonable and in shareholders' best interests. The court held that this view was no reason to refuse the meetings.
The corporate regulator, ASIC, told the directors on 17 August 2026 that it did not intend to oppose the scheme. The court set both meetings for 21 September 2026, with a further hearing to follow.
