Securities Law & Instruments

Headnote

Application under Section 104(2)(c) of the Securities Act (Ontario) and Part 9 of Multilateral Instrument 61-101 -- exemption from sections 93.1-99 of Securities Act (Ontario) and Part 2 of MI 61-101 -- take-over bid for foreign issuer that is not a reporting issuer in any Canadian jurisdiction -- offeror to acquire all outstanding stock of target that it does not already own -- target has 11 registered holders in Canada - registered and beneficial holders in Canada hold less than 4% of the outstanding target securities -- as a result of bidder's management structure a Canadian entity is deemed to own the bidder's interest in the target resulting in foreign bid take-over bid exemption being technically unavailable -- offer subject to laws of Australia -- securityholders in Canada to receive same information and participate on same terms as all other holders of target securities.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 93.1 -- 99, 104(2)(c).

OSC Rule 62-504 Take-over Bids and Issuer Bids.

MI 61-101 Protection of Minority Security Holders in Special Transactions.

August 25, 2010

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the Jurisdiction)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

(the Filer)

AND PRIME INFRASTRUCTURE GROUP

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation):

A. for exemptive relief from the requirements of Sections 93 to 99.1 of the Securities Act (Ontario) (the Act) as they would otherwise apply to an offer by the Filer to acquire the outstanding Stapled Securities (as defined below) of Prime Infrastructure Group (as further defined below and hereinafter referred to as the Group) not already held by the Filer in exchange for limited partnership units of the Filer (the Offer), so that the Filer would hold all of the issued and outstanding Stapled Securities (the Formal Bid Exemption); and

B. for exemptive relief from Part 2 of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (MI 61-101) as it would otherwise apply to the Offer (the 61-101 Exemption).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(i) the Ontario Securities Commission is the principal regulator for this application; and

(ii) the Filer has provided notice that Section 4.7(1) of Multilateral Instrument 11-102 -- Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta and Quebec.

Interpretation

The terms defined in National Instrument 14-101 -- Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined herein.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a Bermuda exempted limited partnership that was established on May 21, 2007.

2. Brookfield Infrastructure Partners Limited, which serves as the general partner of the Filer (the Managing General Partner), holds the general partner interest in the Filer.

3. The Filer's sole asset is an approximate 59% limited partnership interest in Brookfield Infrastructure L.P., a Bermuda exempted limited partnership that was established on August 17, 2007 (BILP).

4. The affairs of the Filer are carried on by the Managing General Partner. The Managing General Partner is an indirect wholly-owned subsidiary of Brookfield Asset Management Inc. (Brookfield), a Canadian company, and therefore Brookfield is deemed to beneficially own the Filer's interest in the Group under the Act. The Filer entered into a management agreement with Brookfield related entities to provide the Filer, BILP and its direct wholly owned subsidiaries and indirect subsidiaries with management and other services.

5. The Filer is a reporting issuer or has equivalent status in all provinces and territories of Canada and is an SEC foreign issuer within the meaning of section 1.1 of National Instrument 71-102 -- Continuous Disclosure and Other Exemptions Relating to Foreign Issuers.

6. The limited partnership units of the Filer (the LP Units) are listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbols "BIP" and "BIP.UN", respectively.

7. The Filer is not in default of any requirement of Canadian securities laws.

8. The Group is the issuer of the Stapled Securities and has its registered addresses in Sydney, Australia. Each "Stapled Security" refers to a share in Prime Infrastructure Holdings Limited, together with a unit of each of the Prime Infrastructure Trust and the Prime Infrastructure Trust 2, which are issued by their responsible entity, Prime Infrastructure RE Limited. These three securities trade and are in other respects treated as a single (or stapled) security. The three stapled entities are together referred to as the Prime Infrastructure Group.

9. The Stapled Securities are listed on the ASX under the symbol "PIH".

10. The Group is not a reporting issuer in any province or territory of Canada and the Stapled Securities are not listed on any securities exchange in Canada.

11. To the best knowledge of the Filer, as at July 16, 2010, the Group had an outstanding share capital of 351,776,795 Stapled Securities.

12. The Filer beneficially owns 140,378,791 Stapled Securities representing 39.91% of the outstanding Stapled Securities (the BIP Securities).

13. The Filer acquired the BIP Securities on November 20, 2009, as part of a comprehensive restructuring and recapitalization in which the Group raised equity of approximately A$1.5 billion from the Filer and other investors to repay debt. The Filer's investment in the BIP Securities accounted for A$712.5 million of the total equity raised.

14. The Filer announced the Offer in Australia by way of press release issued on August 23, 2010. Under the terms of the Offer, holders of Stapled Securities will receive LP Units as consideration for their Stapled Securities, save for those holders of Stapled Securities who participate in the Sales Facilities (as defined below).

15. The Filer has also proposed, concurrent with the Offer and together with the Group, a scheme of arrangement under which holders of Stapled Securities other than the Filer would sell all of their Stapled Securities in consideration for LP Units (the Scheme of Arrangement). The Offer is conditional on the Scheme of Arrangement not being implemented. Thus, the Offer will not interfere with the Scheme of Arrangement (as it will only be completed if the Scheme of Arrangement does not receive the approval of the holders of Stapled Securities or the court), but will permit holders of Stapled Securities to sell their Stapled Securities even if the Scheme of Arrangement is not implemented. To this end, the Offer is not be subject to any minimum acceptance condition.

16. Under the Offer, holders of Stapled Securities residing in certain jurisdictions (not including Canada) where the issuance of LP Units would be illegal or impractical will receive a cash payment in lieu of LP Units. In addition, to provide some limited liquidity, holders of Stapled Securities will be entitled to elect to receive a cash payment in lieu of LP Units (up to a stipulated maximum amount of LP Units) (the Sales Facilities).

17. The Filer will, in a timely manner, mail an offer document, which will comply with all relevant Australian requirements, to all holders of Stapled Securities. The Offer will remain open for acceptance for a period of not less than one month following the mailing of the offer document to holders of Stapled Securities.

18. The Offer is governed by Australian law and is subject to all legal and regulatory requirements, including the rules and regulations of the Australia Securities and Investment Commission (ASIC) and the Australian Stock Exchange (ASX).

19. The Offer constitutes a "take-over bid" according to the definition of such term in the Legislation as certain holders of Stapled Securities are resident in Canada. The Offer is therefore subject to the formal bid requirements set out in the Legislation (the Take-Over Bid Requirements) unless otherwise exempted.

20. An offeror may use the exemption prescribed by the Legislation to be relieved from the Take-Over Bid Requirements upon satisfaction of certain conditions, including that security holders whose last address as shown on the books of the offeree issuer is in Canada hold less than 10% of the outstanding securities of the class subject to the bid at the commencement of the bid.

21. A take-over bid that is subject to the Take-Over Bid Requirements and that is made by a person that has beneficial ownership of, or control or direction over, directly or indirectly, securities of the offeree issuer carrying more than 10% of the voting rights attached to all of the offeree issuer's outstanding voting securities is also subject to the requirements applicable to an "insider bid" pursuant to Part 2 of MI 61-101, including the requirement to obtain a formal valuation.

22. In response to a request made by the Filer in July, 2010, the Group provided the Filer with a list of holders of Stapled Securities.

23. The list of holders of Stapled Securities disclosed five registered holders of Stapled Securities in Ontario, holding an aggregate of 3.95% of the outstanding Stapled Securities.

24. The list of holders of Stapled Securities also disclosed: three registered holders of Stapled Securities in British Columbia holding 136 Stapled Securities; one registered holder of Stapled Securities in Alberta holding 91 Stapled Securities; and one registered holder of Stapled Securities in Quebec holding 3,837 Stapled Securities, representing, in the aggregate, a negligible percentage of the 351,776,795 outstanding Stapled Securities.

25. To the best of the Filer's knowledge, other than the Canadian holders referred to in paragraphs 23 and 24, there are no other registered or beneficial holders of Stapled Securities resident in Canada.

26. Based on this information, to the Filer's best knowledge, Canadian registered and beneficial holders of Stapled Securities, excluding the BIP Securities, hold in the aggregate, 13,916,196 Stapled Securities representing less than 4% of the outstanding Stapled Securities (or, including the BIP Securities, 154,294,987 Stapled Securities representing approximately 44% of the outstanding Stapled Securities).

27. To the Filer's knowledge, the only published market on which the Stapled Securities have traded during the last 12 months is the ASX. As such, the published market on which the greatest dollar volume of trading in the Stapled Securities that occurred during the 12 months immediately preceding the commencement of the bid was not in Canada.

Decisions

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Formal Bid Exemption is granted provided that:

(i) the Offer and any amendments to the Offer are made in compliance with the laws of Australia, including the rules and regulations of the ASIC and ASX;

(ii) the offer document and all other documentation made available to holders of Stapled Securities resident in Australia are concurrently sent by the Filer to all holders of Stapled Securities in Canada and filed by the Filer with the applicable securities regulatory authorities in Canada; and

(iii) Canadian holders of Stapled Securities are entitled to participate in the Offer at the same price and on the same terms and conditions that apply to the general body of holders of Stapled Securities.

"Wes M. Scott"
Commissioner
Ontario Securities Commission
 
"Mary Condon"
Commissioner
Ontario Securities Commission

The further decision of the principal regulator under the Legislation is that the 61-101 Exemption is granted provided that:

(i) the Offer and any amendments to the Offer are made in compliance with the laws of Australia, including the rules and regulations of the ASIC and ASX;

(ii) the offer document and all other documentation made available to holders of Stapled Securities resident in Australia are concurrently sent by the Filer to all holders of Stapled Securities in Canada and filed by the Filer with the applicable securities regulatory authorities in Canada; and

(iii) Canadian holders of Stapled Securities are entitled to participate in the Offer at the same price and on the same terms and conditions that apply to the general body of holders of Stapled Securities.

"Michael Brown"
Assistant Manager, Corporate Finance
Ontario Securities Commission