The corporation sought an order approving a proposed arrangement to collapse its dual-class share structure by purchasing for cancellation all outstanding Class B shares for consideration comprising 9 million newly issued Class A shares and US$300 million in cash.
The application judge approved the arrangement.
The opposing shareholders appealed, arguing the application judge erred in finding the arrangement fair and reasonable.
The Divisional Court dismissed the appeal, holding that the application judge correctly applied the BCE test.
The corporation was not required to demonstrate with certainty that the benefits of the arrangement would offset the costs, but only a reasonable prospect of clearly identified benefits.
The affirmative vote of the Class A shareholders was important evidence supporting the fairness of the arrangement.
