Shareholders back acquisition by related company Critical Metals with 99.96 percent of votes cast
The Supreme Court of Western Australia approved Critical Metals’ acquisition of European Lithium Limited, though an independent expert rated the share scheme reasonable but not fair.
The court gave final approval to two linked schemes of arrangement in Re European Lithium Limited; Ex parte European Lithium Limited [No 2] [2026] WASC 458, handed down on 26 October 2026. One scheme dealt with European Lithium’s shares and the other with its listed options. The court had cleared the schemes to go to a vote at the first hearing in September 2026.
Critical Metals would acquire all of European Lithium’s shares and listed options. Most securityholders would receive Critical Metals shares rather than cash. Shareholders would get 0.045 new Critical Metals shares for each European Lithium share. European Lithium would then delist and become a wholly owned subsidiary of Critical Metals, which would have full ownership of a Greenland rare earth project that the court said appeared central to the company’s value proposition.
The two companies shared directors. Given the potential for conflicts of interest, the court said that an independent board committee and the independent director’s continued recommendation of the schemes gave it “additional comfort” about their fairness and reasonableness.
Securityholders voted at separate meetings on 22 October 2026. The share scheme won 99.96 percent of votes cast and the support of 97.22 percent of shareholders present and voting. Optionholders present and voting backed their scheme unanimously.
The court noted that clearing the statutory majorities did not oblige it to approve a scheme. It added that securityholders were often said to be better placed than the court to judge their own commercial interests. The court found that the schemes were fair and reasonable in the sense the expert explained: the share scheme was not fair but reasonable, and the option scheme was fair and reasonable. The expert also concluded that the deal was in securityholders’ best interests in the absence of a superior proposal, and none had emerged.
The court found no evidence of improper purpose or minority oppression and accepted that disclosure had been full and fair. The Australian Securities and Investments Commission (ASIC) confirmed that it had no objection to the approval. The court dismissed minor discrepancies in the process as “the usual bumps and scrapes” and found that none was material.
The court was informed that both companies intended to rely on its approval to claim an exemption from US registration requirements for the new Critical Metals shares. The court did not decide whether the exemption applied under US law. Instead, it recorded the matters on which the companies proposed to rely, including that the hearing was open to the public and that no securityholder opposed the schemes.
