Subsection 74(1) - Relief from section 53 of the Act for first trades in securities of anissuer to be distributed in connection with the spin-off of the issuer completedpursuant to a plan of arrangement, subject to certain conditions.
Securities Act, R.S.O. 1990, c.S.5, as am., ss. 53 and 74(1)
Companies Act (Quebec) ss. 49 and 123.107.
Rule 45-501 - Exempt Distributions
R.S.O. 1990, c. S.5, AS AMENDED (the "Act")
IN THE MATTER OF
LE GROUPE VIDÉOTRON LTÉE
IN THE MATTER OF
TVA HOLDINGS INC.
UPON the application of Le Groupe Vidéotron Ltée ("GVL"), on behalf of TVAHoldings Inc. ("TVA Holdings"), to the Ontario Securities Commission (the"Commission") for a ruling pursuant to subsection 74(1) of the Act that certain firsttrades in securities to be distributed in connection with a plan of arrangement (the"Arrangement") involving GVL, TVA Holdings and Rogers Communications Inc.("Rogers") under sections 49 and 123.107 of the Companies Act (Quebec) (the "QCA")shall not be subject to section 53 of the Act, subject to certain conditions;
AND UPON considering the application and the recommendation of staff of theCommission;
AND UPON GVL, on behalf of TVA Holdings, having represented to theCommission that:
1. GVL is a communications company amalgamated under the QCA whosesubsidiaries offer services including cable television distribution,telecommunications, Internet access, television production and broadcasting,e-commerce, and remote surveillance services.
2. GVL is a reporting issuer under the Act and is not in default of any of therequirements of the Act or the regulation made thereunder (the "Regulation").
3. The authorized capital of GVL consists of (i) an unlimited number of multiplevoting shares ("GVL Multiple Voting Shares"), (ii) an unlimited number ofsubordinate voting shares ("GVL Subordinate Voting Shares"), (iii) an unlimitednumber of first preferred shares, and (iv) an unlimited number of secondpreferred shares, of which 50,483,892 GVL Multiple Voting Shares and65,274,894 GVL Subordinate Voting Shares were issued and outstanding as atAugust 31, 1999.
4. The GVL Subordinate Voting Shares are listed on The Toronto Stock Exchange(the "TSE").
5. Rogers is a diversified public communications company continued under theCompany Act (British Columbia) which engages through its subsidiaries incellular and other forms of wireless communications, cable television and highspeed Internet access services and video retailing, and publishing, new mediaand radio and television broadcasting.
6. Rogers is a reporting issuer under the Act and, to the best of GVL's knowledge,is not in default of any of the requirements of the Act or the Regulation.
7. The authorized share capital of Rogers consists of 200,000,000 Class A votingshares without par value, 1,400,000,000 Class B non-voting shares ("RogersClass B Shares") with a par value of $1.62478 per share, and 400,000,000preferred shares issuable in one or more series, of which 56,240,494 Class Avoting shares, 146,244,892 Rogers Class B Shares and 2,327,357 preferredshares issued in various series were issued and outstanding as at December31, 1999.
8. Rogers' Class A voting shares are listed on the TSE. The Rogers Class BShares are listed on the TSE and in the United States on the New York StockExchange.
9. Rogers is acting at arms' length with GVL in connection with the Arrangement.
10. TVA Holdings will be a company formed by the amalgamation (the"Amalgamation") under the QCA of 9076-1859 Quebec Inc. ("Quebec Holdco 1")and 9076-1883 Quebec Inc. ("Quebec Holdco 2").
11. Each of Quebec Holdco 1 and Quebec Holdco 2 is a holding companyincorporated under the QCA. Quebec Holdco 1 is an indirect wholly-ownedsubsidiary of GVL and its sole assets are its holdings of shares of QuebecHoldco 2. Quebec Holdco 2 is a wholly-owned subsidiary of Quebec Holdco 1.
12. Following the Amalgamation, the authorized capital of TVA Holdings will beidentical in all material respects to that of GVL and will consist of (i) an unlimitednumber of multiple voting shares ("TVA Holdings Multiple Voting Shares"), (ii) anunlimited number of subordinate voting shares ("TVA Holdings SubordinateVoting Shares"), (iii) an unlimited number of first preferred shares, and (iv) anunlimited number of second preferred shares.
13. TVA Holdings is not currently a reporting issuer under the Act. The TSE hasconditionally approved the listing of the TVA Holdings Subordinate VotingShares.
14. TVA Holdings will not carry on any business other than holding the shares ofTVA Group Inc. ("TVA Group") currently held indirectly by GVL.
15. TVA Group is a television broadcasting company continued under the QCAwhich owns and operates the leading French-language private broadcastingnetwork in Canada and several television stations.
16. TVA Group is a reporting issuer under the Act and is not in default of any of therequirements of the Act or the Regulation.
17. The authorized capital of TVA Group consists of (i) an unlimited number ofparticipating Class A voting shares, (ii) an unlimited number of participatingClass B non-voting shares, and (iii) an unlimited number of preferred sharesissuable in series, of which 4,320,000 Class A voting shares and24,430,229 Class B non-voting shares were issued and outstanding as atAugust 29, 1999.
18. The Class B non-voting shares of TVA Group have been listed on the TSE since1974.
19. As at January 17, 2000, 4,315,062 Class A voting shares and7,910,583 Class B non-voting shares of TVA Group, representing approximately99.9% of the outstanding Class A voting shares and approximately 32.1% of theoutstanding Class B non-voting shares of TVA Group, are held indirectly byGVL.
20. Pursuant to a merger agreement dated February 14, 2000, GVL and Rogershave agreed to combine their two companies through a share exchange by wayof the Arrangement. Pursuant to the Arrangement, among other things,shareholders of GVL will be issued shares of TVA Holdings on a one-for-onebasis based on their holdings of shares of GVL. TVA Holdings will hold all of theshares of TVA Group currently held indirectly by GVL.
21. Immediately prior to the implementation of the Arrangement, Quebec Holdco 1and Quebec Holdco 2 will amalgamate under the QCA to form TVA Holdings.
22. Following the Amalgamation and immediately prior to the Arrangement, theissued and outstanding capital of TVA Holdings shall consist of such numbersof TVA Holdings Multiple Voting Shares and TVA Holdings Subordinate VotingShares (collectively, "TVA Holdings Shares") as are equal to the number of GVLMultiple Voting Shares and GVL Subordinate Voting Shares (collectively, "GVLShares"), respectively, outstanding immediately before the Arrangement.
23. Immediately prior to the Arrangement, all of the TVA Holdings Shares will beheld by GVL.
24. Pursuant to the Arrangement:
(a) GVL will distribute its TVA Holdings Shares to holders of GVL Shares onthe following basis:
(i) holders of GVL Multiple Voting Shares will receive one TVAHoldings Multiple Voting Share for each GVL Multiple VotingShare held; and
(ii) holders of GVL Subordinate Voting Shares will receive one TVAHoldings Subordinate Voting Share for each GVL SubordinateVoting Share held; and
(b) the outstanding GVL Shares will be exchanged for Rogers Class BShares on the following basis:
(i) each holder of GVL Shares who advises GVL that it is a residentof Canada and not exempt from Canadian income tax willexchange its GVL Shares with Rogers on the basis of 0.925 of aRogers Class B Share for each GVL Multiple Voting Share or GVLSubordinate Voting Share held; and
(ii) all other holders of GVL Shares will exchange their GVL Shareswith a wholly-owned subsidiary of Rogers on the basis of 0.925 ofa Rogers Class B Share for each GVL Multiple Voting Share orGVL Subordinate Voting Share held.
25. The effective date of the Arrangement pursuant to which the TVA HoldingsMultiple Voting Shares and TVA Holdings Subordinate Voting Shares are to bedistributed by GVL is expected to be on or about March 29, 2000. As a result ofthe Arrangement, TVA Holdings will become a publicly held company.
26. The Arrangement is subject to the approval of holders of GVL Shares at aspecial general meeting of shareholders scheduled to be held on March 27,2000, by a vote of at least 75% of the votes cast by holders of GVL MultipleVoting Shares and GVL Subordinate Voting Shares who are present in personor represented by proxy at the meeting, each voting separately as a class.
27. The Arrangement is also subject to the approval of the Quebec Superior Court.
28. Each of the issuances or exchanges of securities described in paragraph 24above will be made in reliance upon the exemptions from the registration andprospectus requirements of the Act contained in section 2.8 of Rule 45-501Exempt Distributions ("Rule 45-501").
29. First trades in Rogers Class B Shares acquired under the Arrangement will bemade in reliance on the exemption from section 53 of the Act contained insection 6.6(c) of Rule 45-501.
30. The TVA Holdings Shares distributed to the holders of GVL Shares as part ofthe Arrangement will not be freely tradeable until TVA Holdings has been areporting issuer for a period of 12 months as required by section 6.6 of Rule 45-501.
AND UPON the Commission being satisfied that to do so would not beprejudicial to the public interest;
IT IS RULED, pursuant to section 74(1) of the Act, that the first trade in TVAHoldings Multiple Voting Shares or TVA Holdings Subordinate Voting Shares acquiredby holders of GVL Shares under the Arrangement shall not be subject to section 53 ofthe Act provided that such first trade is made in accordance with the provisions ofsection 6.6 of Rule 45-501, except for the requirement in clause 6.6(c)(i) that TVAHoldings must have been a reporting issuer for at least 12 months at the time of suchfirst trade.
March 14th, 2000.
"J. A. Geller" "Howard I. Wetston"