CAMAC has published a report on Members’ schemes of arrangement.

Members’ schemes of arrangement under Part 5.1 of the Corporations Act can be used in some circumstances instead of takeover bids under Chapter 6 of the Corporations Act to achieve a change of corporate control.

The Advisory Committee was asked by the former Government to consider whether the ‘headcount’ test for shareholder approval of members’ schemes (namely a majority in number of shareholders voting on the scheme as well as a 75% majority of the shares voted) should be removed.

The Committee recommends the removal of the headcount test for the approval of schemes, leaving only the voted shares test (namely, 75% of the shares voted on the resolution).

As a matter of general approach, the Committee is neutral on the question whether changes of corporate control should proceed by a scheme or by a bid in circumstances where either procedure would be open.

The Committee makes a number of other recommendations to improve the operation of the scheme provisions.