Compulsory acquisition of shares: dissenting shareholders must prove unfairness, and market prices may support fairness of the offer.

Dissenting shareholders seeking to resist compulsory acquisition of their shares bear a heavy burden to affirmatively show that the scheme is unfair when it has been accepted by the overwhelming statutory majority. A balance sheet entry for freehold property at cost less depreciation was not treated as a valuation of the asset and did not make the offer misleading. Stock Exchange prices were regarded as a proper indicator of value in the circumstances, and the material placed before the court did not displace the prima facie fairness arising from the very large shareholder acceptance.

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Issues: Whether the dissenting shareholders had shown that the scheme for acquisition of their shares was unfair so as to justify the court in ordering otherwise under the statutory power of compulsory acquisition.

Analysis: Where an offer to acquire shares has been accepted by the overwhelming statutory majority, the applicant resisting compulsory acquisition carries a heavy burden to affirmatively establish unfairness. The balance sheet entry for freehold property at cost less depreciation was not a valuation of the asset and did not justify treating the offer as misleading. The court also treated the Stock Exchange prices as a proper indicator of value in the circumstances, and the material placed before it did not show that the offer was unfair. The applicant had therefore not displaced the prima facie fairness arising from the very large acceptance by shareholders.

Conclusion: The challenge to compulsory acquisition failed and the application was dismissed.

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