Section 238 of the Companies Act (as Revised) and 51Job, Inc.

• Jurisdiction: Cayman Islands
• Court: Grand Court (Cayman Islands)
• Judge: Justice David Doyle
• Judgment Date: 24 November 2025
• Year: 2025
• Docket Number: CAUSE NO: FSD 155 OF 2022 (DDJ)

In the Matter of Section 238 of the Companies Act (As Revised)

And in the Matter of 51Job, Inc.

Neutral Citation Number: [2025] CIGC (FSD) 112

Before:

The Hon. Justice David Doyle

CAUSE NO: FSD 155 OF 2022 (DDJ)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

Determination of the fair value of shares of a company pursuant to section 238 of the Companies Act (2025 Revision)

Appearances:

Richard Boulton KC and Mac Imrie KC instructed by Malachi Sweetman, Adrian Davey and Joanne Poland of Maples and Calder (Cayman) LLP on behalf of 51job, Inc.

Jonathan Adkin KC, instructed by Rocco Cecere, Zachary Hoskin and Matthew Harders of Collas Crill LLP, Christopher Easdon of Campbells LLP and Rupert Bell and Patrick McConvey of Walkers (Cayman) LLP for the CCCW Dissenters

Tom Lowe KC, instructed by Mark Ffrancon Dowds and Kalyani Dixit of Carey Olsen for the Carey Olsen Dissenters

Index

Heading	Paragraphs
Introduction	1 to 7
Summary of outcome	8
The background	9 to 20
Timeline and some definitions	21
Law
— Section 238	23
The Cayman Islands caselaw	24 to 26
— Trina Solar	27 to 56
— Shanda Games	57 to 61
The Delaware jurisprudence
— Cammer	62 to 69
— DFC	70 to 80
— Dell	81 to 95
— Solera	96 to 117
— Stillwater	118 to 134
— Panera	135 to 136
— Fir Tree v Jarden	137 to 145
— Pivotal	146 to 151
The factual evidence
— Mr Yan's evidence	153 to 212
— Ms Chien's evidence	213 to 280
— Mr Robert Anthony Bartell's evidence	281 to 334
— Mr Cheng's evidence	335 to 396
— Mr Tianji (Tony) Jiang's evidence	397 to 440
The expert evidence
— General	442 to 462
— Professor Lehn's first report	463 to 468
— Mr Taylor's first report	469 to 483
— The joint memorandum	484
— Professor Lehn's supplemental report	485 to 496
— Mr Taylor's supplemental report	497 to 519
— The expert oral evidence	520
— Professor Lehn's oral evidence	521 to 572
— Mr Taylor's oral evidence	573 to 702
Submissions	703 to 705
Lists of Issues	706
— The Company's list of issues	707 to 722
— The Dissenters' list of issues	723 to 738
— Additional issues submitted by the Carey Olsen Dissenters	739 to 741
Determination
— The hierarchy point	743 to 749
— Rejection of the DCF analysis in this case	750 to 755
— The methodologies	756 to 758
— Merger price	759 to 761
— Robust public information factors	762
— The Cammer factors	763 to 764
— Actively traded market	765 to 766
— Analyst coverage	767 to 774
— Market makers	775
— Registration statements	776
— Cause and effect	777 to 778
— “Controller” theory	779 to 781
— Access to non-public information and no discrimination between buyers	782
— A chance to bid and a robust market check	783 to 801
— The Special Committee	802
— Involvement of Mr Hsu	803 to 804
— Conflict and “heightened scrutiny”	805 to 810
— Conclusion on robust market check and merger process	811 to 817
— Two merger prices	818 to 821
— Disclosure/discovery issues	822 to 831
— The acquisition premium	832 to 838
— The market price	839
— Semi-strong efficient market	840 to 850
— No MNPI	851 to 853
— The November 2021 Press Release	854 to 858
— The Ocean Link forecasts/projections	859 to 862
— Value relevant information?	863 to 867
— “Deal stock”?	868 to 871
— Affected roll-forward	872 to 879
— Co-movement issue	880 to 885
— Volatility of the Golden Dragon Index	886 to 891
— Affected trading price as start date for AMTP	892 to 919
— The AMTP methodology	920 to 927
— Standing back and sense-check	928 to 933
Conclusions	934 to 939
Summary of determinations	940 to 958
Ancillaries	959
The Order	960

Introduction

1 Under section 238 of the Companies Act (2025 Revision) (“Section 238”) a shareholder is entitled to payment of a fair value of that person's shares upon dissenting from such a merger. At the hearing it is the duty of the court to determine the fair value of the shares of such dissenting members.

2 A lay person may think that if independent professional expert valuers are engaged that the margin of difference on a valuation of shares should not be too great. In this case the difference between the expert valuers is about US$1.7 billion. The merger price was US$61.00 per share/American Depository Share (“ADS”). The Company's valuation expert using the adjusted market trading price (“AMTP”) methodology says that a fair value for the shares is US$31.11 each. The Dissenters' valuation expert using the discounted cash flow (“DCF”) methodology says that a fair value for the shares is US$111.06 per share. Using different methodologies the experts have “arrived on different planets”, in “different galaxies” as the Delaware judges would say.

3 In this judgment I use ADS and shares interchangeably and where $ appears it is US$.

4 The Cayman Islands appears to have created an industry of its own out of Section 238 cases. But they put a huge strain on the legal system, on its judicial administration staff and on its judges. Well-resourced litigants, experts and lawyers raise every conceivable point and sometimes inconceivable points.

5 The lead-in time to trial is too long. Experts' reports need to be more concise and in easily understandable language. Experts need to be truly independent and not partisan. Written submissions need to be shorter. It is not ideal that there are piecemeal additions to the bundles throughout the trial. Trials need to be shorter. Oral submissions and cross-examinations need to be shorter. Judgments take too long to write and are themselves too long in content. This one being a prime example. If I had more time at my disposal it would have been much shorter but I have many other cases crying out for scarce judicial time to be spent on them. Judgments need to be shorter and delivered within a reasonable time. The present approach of the parties and their attorneys makes this near impossible.

6 The parties, the experts and the attorneys must use their resources and skills to reduce the complexity rather than actively seeking to add to it. The parties and their legal advisors need to try much harder, as they are duty bound to do, to assist the court in achieving the overriding objective of dealing with cases justly, expeditiously and economically. I know this is easy for a judge to say and difficult for the parties and attorneys to undertake especially in complex cases where large amounts of money are at stake. Perhaps, however, the Section 238 Sub-Committee of the Financial Services Division can consider the position and make practical recommendations for improvements in the way Section 238 cases are presently presented and conducted before the court. At the moment the position is far from ideal.

7 In fairness I should add that the attorneys and experts in this case did, from time to time, attempt to simplify certain issues for the court's benefit. I also thank the attorneys in this case for enabling the trial to be completed within the time allocated. That no doubt took a lot of cooperation between the legal teams in the background, led by leading counsel and has not gone unnoticed. The fact remains however that insofar as Section 238 cases are concerned all is not well and changes need to be proposed, considered and where appropriate and possible implemented.

Summary of outcome

8 In my judgment the fair value is $31.11 per share.

The background

9 51job, Inc (the “Company”) is an exempted limited company incorporated under the laws of the Cayman Islands. The Company was described as a leading provider of integrated human resource services in the People's Republic of China (the “PRC”).

10 On 21 June 2021 the Company entered into a merger agreement with Garnet Faith Limited (“Garnet”) another Cayman Islands exempted company (the “Original Merger Agreement”). The consideration offered was US$79.05 per share (the “Original Merger Price”).

11 On 1 March 2022 the Petitioner and Garnet entered an agreement by which the Original Merger Agreement was amended (the “Revised Merger Agreement”). The consideration was US$61.00 per share (the “Revised Merger Price”).

12 On 27 April 2022 at 9.00am (Shanghai time) there was an extraordinary general meeting at which a special resolution approving the Revised Merger Agreement was passed.

13 On 6 May 2022 the plan of merger was executed and filed with the Registrar of Companies in the Cayman Islands.

14 On 14 June 2022 the Company made a fair value offer of US$56.38 per share to the Dissenters for the purposes of section 238(8) of the Companies Act (as revised) and without prejudice to the Company's position at trial.

15 The Company presented a petition pursuant to Section 238 on 15 July 2022, and 21 dissenters did likewise.

16 There was a two days directions' hearing on 21 and 22 November 2022. On 2 December 2022 I delivered a 14-page judgment. At paragraphs 3 and 5 I again stressed the duty of the parties and their attorneys to help the court to further the overriding objective of dealing with cases justly and at paragraph 4 I complained of the “somewhat hostile atmosphere between the attorneys.” At paragraph 22 I referred to the need for experts to provide independent assistance to the court by way of an objective unbiased opinion in relation to relevant matters within their expertise. I stated that an expert should never assume the role of an advocate or seek to promote a client's case. At paragraph 28 I stated, “The parties should carefully choose their valuation experts and ensure that they are in a...