551. Exception to valuation requirement: arrangement with another company
(1) Section 550 (valuation of non-cash consideration) does not apply to the allotment of shares by a company ("company A") in connection with an arrangement to which this section applies.
(2) This section applies to an arrangement for the allotment of shares in company A on terms that the whole or part of the consideration for the shares allotted is to be provided by—
(a) the transfer to that company, or
(b) the cancellation,
of all or some of the shares, or of all or some of the shares of a particular class, in another company ("company B").
(3) It is immaterial whether the arrangement provides for the issue to company A of shares, or shares of any particular class, in company B.
(4) This section applies to an arrangement only if under the arrangement it is open to all the holders of the shares in company B (or, where the arrangement applies only to shares of a particular class, to all the holders of shares of that class) to take part in the arrangement.
(5) In determining whether that is the case, the following shall be disregarded—
(a) shares held by or by a nominee of company A,
(b) shares held by or by a nominee of a company which is-
(i) the holding company, or a subsidiary, of company A, or
(ii) a subsidiary of such a holding company,
(c) shares held as treasury shares by company B.
(6) In this section—
(a) "arrangement" means any agreement, scheme or arrangement (including an arrangement sanctioned in accordance with Part 25 (arrangements and reconstructions), and
(b) "company", except in reference to company A, includes any body corporate.