What is a scheme of arrangement?

A scheme of arrangement is a court-approved procedure under UK and similar company law that can be used to implement a takeover. Shareholders vote on it at a court-convened meeting and, if the required majorities are reached, the court is asked to sanction it. Once sanctioned, it binds every shareholder, including those who voted against or did not vote.

What majority does a scheme of arrangement need?

Under section 899 of the Companies Act 2006, a scheme needs approval by a majority in number of the members voting, in person or by proxy, who together represent at least 75% in value. The headcount test means a large number of small holders can defeat a scheme that holders of most of the value support, which is where schemes most often fail unexpectedly.

What is the difference between a scheme of arrangement and a takeover offer?

A contractual takeover offer is made directly to shareholders, who each choose whether to accept, and it can leave a minority in place. A scheme is voted on at a court-convened meeting and, once sanctioned by the court, binds all holders. Schemes give cleaner outcomes but follow a regulated, public timetable and depend on the headcount vote.

M&A

Scheme of Arrangement

Reviewed by iGaming Times editorial teamLast reviewed 24 September 2026

What is Scheme of Arrangement?

A court-approved procedure under UK and similar company law used to implement a takeover, requiring shareholder approval by specified majorities and a court sanction, after which it binds all shareholders.

Key takeaways

A scheme of arrangement is a court-sanctioned procedure and the usual route for a recommended takeover of a UK-listed company.
It needs approval by a majority in number of the shareholders voting who also hold at least 75% of the value voted.
Once sanctioned it binds all shareholders, including those who voted against or did not vote, so no minority is left behind.

Why it matters

A scheme is the usual route for a recommended takeover of a UK-listed company, and it differs from a contractual offer in ways that matter to outcome. It requires approval by a majority in number of the shareholders voting who together hold at least 75% of the value, and once sanctioned by the court it binds everyone, including holders who voted against or did not vote.

That produces cleaner outcomes than an offer, which can leave a minority in place, but it hands considerable power to small shareholders. The majority-in-number test means a large number of small holders can defeat a scheme that holders of most of the value support.

Because the court is involved and the timetable is regulated, the process is slower and more visible than a private sale, and each step produces disclosure that is often the most informative material published about the deal.

The bottom line

A scheme delivers a clean takeover at the price of a public timetable and a headcount vote. The majority-in-number test is where deals unexpectedly fail.

Sources

Companies Act 2006, section 899: Court sanction for compromise or arrangement - legislation.gov.uk (The National Archives)