Easynet caught out by purposive interpretation of Cross-Border Merger Regulations (Re Easynet Global Services Ltd)

Easynet caught out by purposive interpretation of Cross-Border Merger Regulations (Re Easynet Global Services Ltd)

Corporate analysis: In this case the High Court considered whether a UK company could effect a merger pursuant to the Cross-Border Merger Regulations 2007 where the only non-UK EEA company involved in the transaction was a dormant entity.

Original newsscales2

Re Easynet Global Services Ltd

[2016] EWHC 2681 (Ch)

In this case, the High Court considered whether a UK company could effect a merger pursuant to the Cross-Border Merger Regulations 2007, SI 2007/2974 as amended by SI 2008/583 and SI 2011/1606 (Regulations) where the only non-UK EEA company involved in the transaction was a dormant entity.

What was the background to the case?

This was an application by Easynet Global Services Ltd (Easynet

) for permission under the Regulations, reg 11 to convene a meeting of its sole shareholder. This was intended to be the first step in a series of procedural steps under the Regulations whereby 22 companies (all of which were part of the same group) would be merged in to Easynet.

When can the Regulations be used to effect a merger?

The procedure under the Regulations is discussed in detail in our Practice Note: Cross border merger regulations. However, in summary, the Regulations can be used where there is a cross-border element to a merger transaction, ie, where there is a merger between:

  • a UK-incorporated company, and
  • a company registered in another EE

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