Share splitting and takeover schemes: the Dee Valley case

In Re Dee Valley Group plc, the court was asked to consider the validity of splitting shareholdings for the purpose of defeating the “majority in number” test in a scheme of arrangement used to effect a takeover. In the first case to consider the question, the High Court ruled that the votes of shareholders who had acquired their shares from a person splitting his holding with the sole purpose of defeating the scheme were invalid. This briefing considers the Court's judgment and its implications for takeover schemes.