Induction Healthcare Group Plc, Re

This is the hearing for the sanctioning of a scheme of arrangement concerning Induction Healthcare Group, which I shall refer to as the “Company”, to effect its takeover by an English company, VitalHub UK Ltd, which I shall refer to as “VitalHub”. VitalHub is a direct subsidiary of VitalHub Corporation, a company incorporated in Canada, with its registered office in Toronto.

This ruling, made ex tempore, draws substantially on the helpful written submissions of Mr Horan of Counsel. I am very grateful to him for the clarity with which he has explained this application and the Scheme.

The Company is listed on the AIM of the London Stock Exchange. The takeover values the Company at £9.7m, and the consideration is all cash. Scheme shareholders will receive 10p per Scheme share, and that is a premium of 67.7% to the closing middle market price of 6p on 9 April 2025, which is the trading day before the announcement of the bid. The Scheme had strong support from Scheme shareholders at the Court meeting: 91.63% by value and 72.27% by number approved the Scheme.

No intention to oppose the sanctioning of the Scheme has been communicated. No-one has appeared in court before me today to raise any objection. Only the parties seeking the sanction have appeared before me today.

I will not go through the background details of the Scheme. It is fully set out, not only in the written submissions of Mr Horan, but also in the evidence that I have received from the Applicants, which is referred to in those written submissions and set out in a suggested reading list at the end of the written submissions.

The Scheme is stated in Part 3 of the Scheme document, which will be annexed to the order that I will, in due course, make. There is one class of Scheme shares, and these are all the Company’s ordinary shares, of 0.5p each. There are various conditions to the Scheme, which have either been satisfied, or treated as satisfied, or waived. ICC Judge Burton ordered the convening of a court meeting on 15 April 2025. By that order, permission was given for the convening a single meeting of holders of Scheme shares, to consider – and if thought fit – approve the Scheme.

I have seen the Chair’s report of the meeting, and I have read the report, and I am satisfied that (save in one regard) the matter was regularly conducted. The one irregularity was to notice not having been given (by error) to six Scheme shareholders under the formal process directed by the Court. I will come back to that, in a moment.

The turnout at the court-directed meeting was 70.75% by value of Scheme shares eligible to record, as at the voting record time, and 41.58%, by number of Scheme shareholders, which I accept is a good turnout by takeover scheme standards. Various undertakings to vote have been set out in the materials before me, and I note those.

I will proceed to the question of the Court’s jurisdiction, which is derived from Part 26 of the Companies Act 2006. The power to sanction the Scheme is at section 899.

I am satisfied that this Scheme is, as it must be, a compromise or arrangement between the Company and its members. Such an arrangement requires a degree of give and take, and I am satisfied that this jurisdictional requirement is met.

Next, I must be satisfied that the class of members which voted on the proposed Scheme is correctly constituted. The issue is not one of interests but rights, and it seems to me that the class composition is correct in this case, and there is no difficulty here. This was a straightforward case of a single meeting of Scheme shareholders, and that is what the ICC Judge ordered.

I turn to the question of sanction by the Court on this occasion. Essentially – and without going into case law, which is fairly trite – there are four matters which require the Court’s attention: first, the Court must be satisfied that the provisions of the statute have been complied with; next, the Court must be satisfied that the class of shareholders the subject of the court meeting was fairly represented by those who attended the meeting, and the statutory majority acting bona fide and not coercing the minority, in order to promote interests adverse to those of the class they purport to represent; thirdly, an intelligent, honest person, a member of the class concerned and acting in respect of his own interest might reasonably approve the Scheme; and fourthly, there must be no blot on the Scheme.

Going through these, I am satisfied that the statutory criteria are met. The point is made as regards the omission of the six shareholders in the USA and Australia from the formal notification process. It does not affect this element. The point is made that, in fact, five of the six had sufficient notice to vote, albeit indirectly, and that the sixth shareholder, his holding was very small. It does seem to me that this is not a matter that can affect the question of satisfaction of the statutory criteria.

In terms of the representation of the class concerned, the meetings – or meeting, as I have said – was properly convened. There is nothing to suggest that anyone was promoting interests averse to the class of Scheme shareholders. The turnout was good, and the statutory majorities, as I say, were all met.

It also seems to me that this is a matter which would receive the reasonable approval of an intelligent and honest person, acting in their own interests. The Scheme was unanimously recommended by the Company’s directors, albeit with one resignation before that recommendation was made, and these directors have all been advised by Alto Capital as to the financial terms of the acquisition. Of course, the Court has a wide discretion to sanction a scheme, and it will not act as a rubber stamp. That being said, where shareholders are acting on full information and make a decision which is clear-cut, they are to be regarded as the best judge of their commercial interests, and the Court will not (without good reason) enter into a commercial second guessing game. The Scheme is a reasonable proposal, to effect the takeover of the Company at a premium, and it seems to me that this is a case where the reasonable approval of an intelligent and honest person test is met.

The last thing, I turn to consider the question of blot. It seems to me that the non-notification of the shareholders in other jurisdictions can be considered under a variety of heads but is perhaps best considered under this head. Clearly, there has been a technical or legal failing in the execution of notification. But it seems to me this is very far removed from there being a blot. This was a minor and erroneous omission. It has been dealt with by notice in other ways, and the only shareholder who there cannot be said there has been notice is so minor, that it cannot affect the outcome of this ruling, which is that I find that the jurisdictional and discretionary requirements of the 2006 Act are met, and I will make an order sanctioning the Scheme in substantially the form that is before me, to which I will now turn.