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NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

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NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS Powered By Docstoc
					NOTICE OF
EXTRAORDINARY
GENERAL MEETING
OF SHAREHOLDERS
Corporate Express Australia Limited
(ABN 94 000 728 398)




Notice is given that an Extraordinary
General Meeting of the Shareholders
of Corporate Express Australia
Limited (“Company”) will be held
immediately following the Annual
General Meeting of the Company
to be held at 12 noon on Thursday
20 May 2010 at the offices of Baker
& McKenzie, Sydney Room, Level 27,
AMP Centre, 50 Bridge Street, Sydney,
New South Wales.




                                        |   1
    BUSINESS                                                     Voting Entitlements
                                                                 Subject to the Voting Exclusion Statement above,
    1. Approval of Financial Assistance by the Company           to determine the entitlements of a shareholder at
    To consider and if thought fit to pass the following          the extraordinary general meeting, the directors have
    resolution as a special resolution:                          decided that the shareholding of a Shareholder will be
                                                                 as it appears in the share register at 12 noon Sydney time,
    THAT, for the purposes of section 260B(1) of the
                                                                 Tuesday 18 May 2010.
    Corporations Act 2001 (Cth) (“Corporations Act”),
    approval is given for the transactions described and
                                                                 Proxies
    contemplated in the Statement of Material Information
    which accompanies this Notice of Meeting and all             If you are a member entitled to attend and vote you are
    elements of those transactions which may constitute the      entitled to appoint one or two proxies. Where two proxies
    giving of financial assistance by the Company, including      are appointed, you may specify the number or proportion
    (without limitation) that the Company may:                   of votes that each may exercise, failing which each may
                                                                 exercise half the votes. A proxy need not be a member
    (i) pay the Special Dividend;
                                                                 of the Company.
    (ii) enter into the Facility Agreement and the
         Subordination Deed; and                                 If you wish to appoint one proxy, please use the form
                                                                 provided and return it to the share registry, at the
    (iii) enter into any additional documents, and do
                                                                 address specified on the proxy form. If you wish to
          all additional things, as may be necessary or
                                                                 appoint two proxies please obtain an additional form
          desirable for the purposes of or to give effect to
                                                                 from the share registry. To be effective a proxy form
          the transactions contemplated in the Statement
                                                                 must be received by no later than 12 noon Sydney time,
          of Material Information.
                                                                 Tuesday 18 May 2010. Address and facsimile details are
    The background and reasons behind the resolution             contained on the proxy form.
    are more fully set out in the accompanying Statement
                                                                 If a proxy is instructed to abstain from voting on an item
    of Material Information which is attached to this Notice
                                                                 of business, that person is directed not to vote on the
    of Meeting. Shareholders should read the Statement of
                                                                 shareholder’s behalf on a show of hands or a poll and the
    Material Information in full and carefully consider
                                                                 shares the subject of the proxy appointment will not be
    its contents.
                                                                 counted in computing the required majority.
                                                                 Shareholders who return their proxy forms with a
    IMPORTANT NOTES                                              direction how to vote but do not nominate the identity of
                                                                 their proxy will be taken to have appointed the chairman
    Voting Exclusion Statement                                   of the meeting to vote on their behalf. If a proxy form is
    The Company will disregard any votes cast in favour          returned and the nominated proxy does not attend the
    of Resolution 1 by Staples Australia Pty Limited and         meeting, the chairman of the meeting will act in place
    any associate of Staples Australia Pty Limited (“Staples     of the nominated proxy and vote in accordance with
    Australia”) including, Staples International BV. However,    any instructions. Proxy appointments in favour of the
    the Company will not disregard a vote if:                    chairman of the meeting, any director, or the secretary
    (a) it is cast by a person as proxy for the person who       which do not contain a direction how to vote will be
        is entitled to vote, in accordance with the directions   used where possible to support the resolutions proposed
        on the proxy form; or                                    in this notice.

    (b) it is cast by a person chairing the meeting as proxy
                                                                 Voting Generally
        for a person who is entitled to vote, in accordance
        with a direction on the proxy form to vote as the        The Company’s Constitution provides that, on a show of
        proxy decides.                                           hands, every person present and qualified to vote shall
                                                                 have one vote. If you appoint one proxy, that proxy may
    If prior to the Extraordinary General Meeting, the Offer     vote on a show of hands, but if you appoint two proxies,
    (as that term is defined in the Statement of Material         only one may vote on a show of hands. If a proxy has been
    Information) has become unconditional then, under the        appointed by two or more members who specify different
    terms of the Offer, a Shareholder who has accepted the       ways to vote on a resolution, the proxy may not vote on
    Offer in respect of their ordinary shares in the Company     a show of hands.
    (“Shares”) will cease to have the right to vote those
    Shares. For further information, see section 12.5 of         Corporate Representatives
    the Staples Australia Bidder’s Statement.                    If a holding is registered in a company name, any
                                                                 individual voting on behalf of that company must do
                                                                 so either as a proxy or a duly appointed corporate
                                                                 representative in accordance with the Corporations Act.




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STATEMENT OF MATERIAL INFORMATION                              Restrictions on companies giving financial assistance
                                                               Under section 260A of the Corporations Act, a company
Resolution 1: Approval of Financial Assistance by the          may financially assist a person to acquire shares in the
Company                                                        company or a holding company of the company only
Background                                                     if giving the assistance does not materially prejudice
On 17 March 2010, Staples Australia, a wholly owned            (a) the interests of the company or its shareholders or
subsidiary of Staples, Inc, announced an off-market            (b) the company’s ability to pay its creditors, or otherwise,
takeover offer (“Offer”) for all the Shares that Staples,      if the financial assistance is approved by the Company’s
Inc does not, directly or indirectly, already own.             Shareholders.

Staples Australia is offering Shareholders A$5.60 cash for     Under section 260B of the Corporations Act, the financial
each Share.                                                    assistance can be approved by Shareholders by a special
                                                               resolution passed at a general meeting of the Company,
As previously announced, the Company has applied for           with no votes being cast in favour of the resolution by the
a ruling from the Australian Taxation Office (“ATO”) to         person acquiring the shares or by their associates.
facilitate the payment of a fully franked special dividend
of up to A$0.78 per Share (“Special Dividend”). Subject        A company may be regarded as giving financial assistance
to obtaining a favourable tax ruling, the Special Dividend     if it makes a payment of money (such as a dividend) or
would be declared and become payable after the Offer           if it gives something needed in order that a transaction
becomes unconditional.                                         be carried out or something in the nature of aid or
                                                               help. An example of financial assistance is the giving of
If the Special Dividend is declared and paid, Staples          undertakings and making of representations to a person
Australia is entitled to reduce the Offer consideration        under a loan facility agreement.
payable to Shareholders by the amount of the Special
Dividend.                                                      Accordingly, the payment of the Special Dividend may
                                                               be considered to be financially assisting Staples Australia
Staples International BV, an indirect wholly owned             to acquire Shares under the Offer and the giving of
subsidiary of Staples, Inc, will be a Shareholder as at        undertakings and making of representations by the
dividend record date for the Special Dividend and so will      Company in the Facility Agreement and Subordination
be entitled to receive the Special Dividend.                   Deed may give financial assistance to Staples Australia
The Company intends to fund the Special Dividend out of        in connection with the Offer.
existing cash and debt facilities, and a loan facility from    Reasons for giving financial assistance
Staples Corp BV ("Lender"), a subsidiary of Staples, Inc,
                                                               Subject to obtaining a favourable ATO ruling and the
on arm’s length terms.
                                                               Offer becoming unconditional, the Company proposes
To the extent the Special Dividend will be funded via          to pay the Special Dividend to Shareholders which will
a debt facility provided by the Lender, the Company            be deducted from the Offer consideration payable to
and the Lender will enter into a Facility Agreement            Shareholders.
documenting the loan. Further, a Subordination Deed
                                                               The payment of the Special Dividend will enable
will be entered between the Company’s existing lenders
                                                               Shareholders to receive some of the Offer consideration
National Australia Bank Limited, Commonwealth Bank of
                                                               in the form of a fully franked dividend. This may, in
Australia, Westpac Banking Corporation, Australia and
                                                               turn, give certain Shareholders the ability to obtain the
New Zealand Banking Group Limited, ANZ National Bank
                                                               imputation benefit associated with the franking credit
Limited (collectively, “Senior Creditors”), the Company
                                                               attaching to the Special Dividend.
and Staples, Inc. Certain subsidiaries of the Company may
guarantee the loan amounts advanced to the Company by          The tax implications of the proposed Special Dividend
the Lender.                                                    will depend on the individual circumstances of each
                                                               Shareholder. Further, the ATO ruling to be obtained
Under the terms of the Facility Agreement, the Lender
                                                               by the Company will set out the ATO’s view of the tax
agrees to advance to the Company an amount of up to
                                                               implications of the proposed Special Dividend.
approximately $132 million on standard commercial arm’s
length terms. The key terms of the Facility Agreement          Shareholders are advised to seek their own financial and
regulating the activities of the Company, being the            tax advice.
representations, covenants and events of default, are
                                                               Effect of financial assistance
typical for an arm’s length transaction of this nature. They
are based on the representations, covenants and events         The Company has concluded that providing the financial
of default in the club financing documents entered into         assistance described above is in the best interests of the
between the Company and the Senior Creditors on 3              Company and its Shareholders.
September 2009.                                                The directors have no reason to believe that the payment
The debt under the Facility Agreement is fully                 of the Special Dividend is not in the best interests of
subordinated to the debt to the Senior Creditors under         the Company and its Shareholders and do not have any
the terms of the Subordination Deed.                           reason to believe that the Company may default in its
                                                               obligations under either existing debt facilities, the Facility
                                                               Agreement or the Subordination Deed (each a, "Facility").

                                                                                                                               |   3
    Nonetheless, if there is a default by the Company under        Prior notice to Australian Securities & Investments
    the terms of any Facility, the relevant lenders may become     Commission
    entitled to enforce any of their rights under those            As required by section 260B(5) of the Corporations
    agreements and such enforcement may materially prejudice       Act, copies of this Notice of Meeting and Statement
    the interests of the Company. However, at such a point it is   of Material Information, as sent to Shareholders, were
    quite possible that the Company would be a wholly owned        lodged with the Australian Securities & Investments
    subsidiary of Staples, Inc.                                    Commission prior to despatch to Shareholders.
    Advantages of proposed resolution
                                                                   Disclosure
    The payment of the Special Dividend and entry into
    the related Facility Agreement and Subordination Deed          The directors consider that this Statement of Material
    should enable Shareholders to receive that portion of          Information contains all information known to the
    the Offer consideration that is represented by the Special     Company that would be material to the Shareholders
    Dividend as a fully franked dividend.                          in deciding how to vote on the proposed resolution
                                                                   other than information which it would be unreasonable
    This may, in turn, give certain Shareholders the ability       to require the Company to include because it has been
    to obtain the imputation benefit associated with the            previously disclosed to the Shareholders of the Company.
    franking credit attaching to the Special Dividend.
    All Shareholders on the dividend record date will receive      Recommendation
    the Special Dividend from the Company.                         The directors recommend that the Shareholders vote in
                                                                   favour of Resolution 1 to approve the giving of financial
    Disadvantages of the proposed resolution
                                                                   assistance.
    As outlined above, an Australian resident Shareholder
    will only be in a position to obtain the benefit of franking
    credits attached to the Special Dividend if certain pre-       19 April 2010
    requisites are satisfied. In some cases, a Shareholder that
    is not an Australian resident may be subject to Australian
    dividend withholding tax even if the Special Dividend is
    fully franked Shareholders are advised to seek their own
    financial and tax advice.
    Further, if there is a default by the Company under the
    terms of any Facility, the relevant lenders may become         Kathleen Forbes
    entitled to enforce any of their rights under those            Company Secretary
    agreements and such enforcement may materially
    prejudice the interests of the Company.

    Passing the Financial Assistance Resolution
    Under section 260B of the Corporations Act, Shareholder
    approval for financial assistance by the Company must be
    given by:
    (a) a special resolution passed at a General Meeting of
        the Company with no votes being cast in favour of
        the Resolution by Staples Australia or its associates
        (including Staples International BV); or
    (b) a resolution agreed to, at a General Meeting, by all
        ordinary Shareholders of the Company.
    In the present circumstances, given that it is unlikely all
    ordinary Shareholders will vote on the Resolution, the
    proposed financial assistance must be approved by the
    Shareholders of the Company passing the Resolution by
    special majority of 75% of those present and voting at the
    Extraordinary General Meeting.




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Description: NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS