An Objector To Compulsory Acquisition’s Narrow Path To Success

Where objections are lodged against a proposed compulsory acquisition under Chapter 6A of the Corporations Act, the residual holders can prevent the compulsory acquisition proceeding only if the 90%+ holder cannot satisfy the Court that the proposed compulsory acquisition price is “fair value”. 
Justice Markovic’s judgment in North Limited v Zentree Investments Limited, in the matter of Energy Resources of Australia Ltd [2026] FCA 695 reinforces that objecting shareholders will have a narrow avenue to attack the proposed acquisition price and difficulty in pursuing that attack in the absence of an obvious and material mistake by the independent expert.

In brief

• North Limited, a subsidiary of Rio Tinto Limited, held 98.43% of the shares in ERA. It sought to acquire the 1.57% of shares in ERA that it did not already own for $0.002 (or 0.2 cents) per share.