Mutual Reliance Review System for Exemptive Relief Applications - In connection witha Dutch Auction issuer bid, offeror exempt from the requirement to take up and pay forsecurities deposited proportionately according to the number of securities deposited tothe bid and the associated disclosure requirement - Offereor exempt from the formalvaluation requirement on the basis that there is a liquid market for the securities subjectto the issuer bid.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c.S.5, as am., ss. 95(7) and 104(2)(c).
Applicable Ontario Regulations
Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., ss. 189(b)and item 9 of Form 33.
Applicable Ontario Rules
In the Matter of Insider Bids, Issuer Bids and Take-over Bids in Anticipation of a GoingPrivate Transaction (1997) 20 O.S.C.B. 1219 (March 1, 1997), as amended.
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
OXFORD PROPERTIES GROUP INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "DecisionMaker") in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec,Nova Scotia and Newfoundland (the "Jurisdictions") has received an application (the"Application") from Oxford Properties Group Inc. ("Oxford") for a decision pursuant to thesecurities legislation (the "Legislation") that, in connection with the proposed purchase byOxford of a portion of its outstanding common shares (the "Shares") pursuant to an issuerbid (the "Offer"), Oxford be exempt from the requirements in the Legislation to: (i) take upand pay for securities proportionately according to the number of securities deposited byeach securityholder (the "Proportionate Take-up and Payment Requirement"); (ii) providedisclosure in the issuer bid circular (the "Circular") of such proportionate take-up andpayment (the "Associated Disclosure Requirement"); and (iii) obtain a valuation of theShares and provide disclosure in the Circular of such valuation or a summary thereof andof prior valuations (the "Valuation Requirement");
AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commission is the PrincipalRegulator for the Application;
AND WHEREAS Oxford has represented to the Decision Makers as follows:
1. Oxford is a reporting issuer or the equivalent in each of the Jurisdictions and is notin default of any requirement of the Legislation.
2. The authorized capital of Oxford includes an unlimited number of Shares, of whichapproximately 56,652,862 were issued and outstanding as of February 29, 2000.
3. The Shares are listed and posted for trading on The Toronto Stock Exchange (the"TSE"). On February 29, 2000, the closing price of the Shares on the TSE was$11.80 per Share. Based upon such closing price, the Shares had an aggregatemarket value of approximately $668,503,772 as at that date.
4. To the knowledge of management of Oxford, the only person or company thatowned, directly or indirectly, or exercised control or direction over, more than 10%of the outstanding Shares is the Ontario Municipal Employees Retirement System("OMERS"), which owns approximately 11,228,750 Shares representingapproximately 19.9% of the class.
5. Pursuant to the proposed Offer, Oxford proposes to acquire Shares in accordancewith the following modified Dutch auction procedure (the "Procedure"), as disclosedin the Circular to be sent by Oxford to each holder of Shares (collectively, the"Shareholders"):
(a) The Circular will specify the maximum aggregate number of Shares thatOxford intends to purchase under the Offer (the "Specified Number").
(b) The Circular also will specify the range of prices (the "Range") within whichOxford is prepared to purchase Shares under the Offer.
(c) Any Shareholder wishing to tender to the Offer will have the right either to:(i) elect to retain his, her or its proportionate interest in Oxford following theOffer (a "Proportionate Tender Election"); or (ii) tender a specified numberof Shares, representing all or a portion of the Shareholder's Shares at theShareholder's discretion (a "Specified Tender Election").
(d) All Shares tendered by Shareholders who fail to specify whether they aremaking a Proportionate Tender Election or Specified Tender Election will beconsidered to have been tendered pursuant to a Specified Tender Election.
(e) In addition to having the right to make a Proportionate Tender Election orSpecified Tender Election, any Shareholder wishing to tender to the Offerwill have the right either to: (i) specify the lowest price within the Range atwhich the Shareholder is willing to sell the tendered Shares (an "AuctionTender"); or (ii) elect to be deemed to have tendered the Shares subject tothe Shareholder's Proportionate Tender Election or Specified TenderElection at the Purchase Price determined in accordance with subparagraph5(h) below (a "Purchase Price Tender").
(f) All Shares tendered by Shareholders who fail to specify any tender price forsuch tendered Shares and fail to indicate that they have tendered suchShares pursuant to a Purchase Price Tender will be considered to havebeen tendered pursuant to a Purchase Price Tender.
(g) On the expiry date of the Offer, each Shareholder who makes aProportionate Tender Election (collectively, the "Proportionate TenderGroup") will be deemed to have tendered that percentage of theShareholder's Shares equal to that percentage of the outstanding Shares,excluding Shares owned by the Proportionate Tender Group, tendered to theOffer by the Shareholders who made a Specified Tender Election(collectively, the "Specified Tender Group").
(h) The purchase price (the "Purchase Price") of the Shares tendered to theOffer will be the lowest price that will enable Oxford to purchase theSpecified Number and will be determined based upon the number of Sharestendered pursuant to an Auction Tender at each price within the Range andtendered pursuant to a Purchase Price Tender, with each Purchase PriceTender being considered a tender at the lowest price within the Range forthe purpose of calculating the Purchase Price.
(i) All Shares tendered at prices above the Purchase Price will be returned tothe appropriate Shareholders.
(j) All Shares tendered by Shareholders who specify a tender price for suchtendered Shares that falls outside the Range will be considered to havebeen improperly tendered, will be excluded from the determination of thePurchase Price, will not be purchased by Oxford and will be returned to theappropriate Shareholders.
(k) Any Shareholder who owns fewer than 100 Shares and, pursuant to aSpecified Tender Election, tenders all of such Shareholder's Sharespursuant to an Auction Tender at or below the Purchase Price or pursuantto a Purchase Price Tender will be considered to have made an "Odd-LotTender".
(l) If the aggregate number of Shares validly tendered, or deemed to have beentendered, to the Offer at or below the Purchase Price and not withdrawn isless than or equal to the Specified Number, Oxford will purchase all Sharesso deposited pursuant to Specified Tender Elections and such percentageof the Shares of each member of the Proportionate Tender Group as willmaintain such Shareholder's proportionate equity interest in Oxford followingcompletion of the Offer.
(m) If the aggregate number of Shares validly tendered, or deemed to have beentendered, to the Offer at or below the Purchase Price and not withdrawnexceeds the Specified Number, Oxford will take up and pay for validlytendered Shares on a pro rata basis according to the number of Sharestendered by each member of the Specified Tender Group and deemed tohave been tendered by each member of the Proportionate Tender Group,except that Shares tendered pursuant to Odd-Lot Tenders will not be subjectto proration.
6. Prior to the expiry of the Offer, all information regarding the number of Sharestendered and the prices at which such Shares are tendered will be kept confidentialand the depository for the Offer will be directed by Oxford to maintain suchconfidentiality until the Purchase Price is determined.
7. Since the Offer is for fewer than all of the Shares, if the number of Shares tenderedto the Offer at or below the Purchase Price exceeds the Specified Number, theLegislation would require Oxford to take up and pay for deposited Sharesproportionately, according to the number of Shares deposited by each Shareholder.In addition, the Legislation would require disclosure in the Circular that Oxfordwould, if Shares tendered to the Offer exceeded the Specified Number, take upShares proportionately according to the number of Shares tendered by eachShareholder.
8. Oxford has received:
(a) an opinion (the "Liquidity Opinion") from CIBC World Markets Inc., anindependent registered dealer, that there is a liquid market in the Shares forminority Shareholders before the making of the Offer and, following theOffer, minority Shareholders who decline the Offer will have available amarket that is not materially less liquid than the market that existed prior tothe making of the Offer; and
(b) a statement from the TSE indicating that it concurs with the LiquidityOpinion.
9. The Circular will:
(a) disclose the mechanics for the take-up of and payment for, or return of,Shares as described above;
(b) explain that, by tendering Shares at the lowest price in the Range, aShareholder can reasonably expect that Shares so tendered will bepurchased at the Purchase Price, subject to proration as described above;
(c) disclose, if known to Oxford after reasonable inquiry, whether OMERSintends to accept or decline the Offer;
(d) describe the effect that the Offer, if successful, will have on the direct and/orindirect voting interest of OMERS; and
(e) include the Liquidity Opinion and a statement that the TSE concurs with theLiquidity Opinion.
AND WHEREAS pursuant to the System, this MRRS Decision Document evidencesthe decision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Maker with the jurisdiction to make the Decisionhas been met;
THE DECISION of the Decision Makers in the Jurisdictions pursuant to theLegislation is that, in connection with the Offer, Oxford is exempt from the ProportionateTake-up and Payment Requirement, the Associated Disclosure Requirement and theValuation Requirement, provided that Shares tendered to the Offer are taken up and paidfor, or returned to the Shareholders, in accordance with the Procedure.
March 28th, 2000.
"J. A. Geller" "R. Stephen Paddon"