Question

After news of a takeover offer being made for Boon Ltd, its Directors enter into discussions with Hand Ltd to purchase certain business activities of Hand Ltd. In consideration, Boon Ltd will issue shares to Hand Ltd. The purchase will increase the profits of Boon Ltd and enable large dividends to be paid to its shareholders. Millie, a shareholder in Boon Ltd, learns of the proposed purchase and is strongly opposed to the transaction.

Advise Millie of any legal rights she may have to prevent the transaction.

Answer 1

Based on Corporations Act 2001 CTh,

Millie has voting rights if she holds majority shares or has preferential voting shares and has right to exercise her shares at the special General body meeting where company announces share price of each sold share and any other stock splits if any. Upon successful confirmation and satisfaction she can vote in favour of merger or acquisition else she can vote against it. Based on majority voting the verdict gets materialised.