While the scheme of approval was passed by a majority of 89. 6 per cent of shareholders by number and 96. 8 per cent by shareholding — well above the respective majorities of 50 per cent and 75 per cent required to succeed — ASIC has flagged concerns over a side-deal Woolworths Holdings has offered DJs’ biggest shareholder, Solomon Lew.
If the deal is cleared by the court, DJs shares will be delisted from the Australian Securities Exchange on July 18 and Woolworths Holdings — which has no connection to Australian retailer Woolworths Limited — will take control of the company on August 1.
Woolworths owns 88 per cent of Country Road and has offered to make a $17 per share takeover bid for the rest of that company — in which Mr Lew owns almost all of the remaining shares — if the DJs bid succeeds.
But the regulator could argue that because Mr Lew’s shares were not voted until the meeting, when proxies lodged prior to the meeting made it clear the deal was likely to pass even without his support, the Country Road deal still amounted to an inducement.
Read more here: Business Spectator