Mutual Reliance Review System for Exemptive Relief Applications -- Take-over bid -- Relief from Part XX of the Securities Act (Ontario) -- Take-over bid in Quebec and Ontario caused by transfers of shares to a vehicle for the privatisation of a company by way of amalgamation -- Transfers from shareholders to the privatisation vehicle trigger the take-over bid requirements -- Management proxy circular for shareholders' meeting disclosed details of the amalgamation transaction, including pre-amalgamation transfers of shares -- Amalgamation transaction approved by a majority of over 99.9% of votes cast in person or by proxy.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 104(2)(c).
February 23, 2007
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
QUEBEC AND ONTARIO
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
4385977 CANADA INC.
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (the "Decision Maker") in each of the Jurisdictions has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the "Legislation") that relief be granted from the application of the formal take-over bid requirements in the Legislation, including but not limited to the provisions relating to delivery of an offer and take-over bid circular and any notices of change or variation thereto, delivery of a directors' circular and any notices of change or variation thereto, minimum deposit periods and withdrawal rights, take-up of and payment for securities tendered to a take-over bid, disclosure, financing, restrictions upon purchases of securities, identical consideration and collateral benefits (the "Take-over Bid Requirements"), and in Québec, the obligation to file the report prescribed by Section 189.1.2 of the Securities Regulation (Québec) (the "Regulation") and the payment of the fees prescribed by Section 271.4 of the Regulation (the "Notice and Fees Requirements"), with respect to the Transfers (as hereinafter defined) (collectively, the "Requested Relief").
Under the Mutual Reliance Review System for Exemptive Relief Applications,
(a) the Autorité des marchés financiers is the principal regulator for this application, and
(b) this MRRS decision document evidences the decision of each Decision Maker.
Defined terms contained in National Instrument 14-101 -- Definitions have the same meaning in this decision unless they are defined in this decision.
This decision is based on the following facts represented by the Filer.
1. The Filer is a corporation existing under the laws of Canada and Gestion Bernard Bélanger Ltd ("GBB") is the sole shareholder of the Filer. The Filer is not a reporting issuer in any jurisdiction.
2. GBB is a corporation existing under the laws of Canada and is controlled by Mr. Bernard Bélanger, Chairman of the Board and Chief Executive Officer of Premier Tech Ltd. ("PTL"). GBB is not a reporting issuer in any jurisdiction.
3. PTL is a corporation existing under the laws of Canada and is a reporting issuer in each Jurisdiction.
4. The authorized share capital of PTL consists of an unlimited number of class A subordinate voting shares ("SVS"), class B multiple voting shares ("MVS"), class A preferred shares and class B preferred shares. Each SVS entitles its holder to one vote and each MVS entitles its holder to ten votes. The class A and B preferred shares carry no voting rights.
5. Only the SVS are listed on the Toronto Stock Exchange.
6. As of January 24, 2007, there were 15,492,695 SVS and 849,500 MVS issued and outstanding. There are no class A or B preferred shares issued and outstanding.
7. As at January 24, 2007, the Privatisation Group (as hereinafter defined) held an aggregate of 8,287,279 SVS representing approximately 53.49% of the SVS issued and outstanding and 843,000 MVS representing approximately 99.23% of the MVS issued and outstanding. Altogether, the Privatisation Group holds shares in PTL carrying 16,717,279 votes representing approximately 68.14% of the total voting rights attached to all shares of PTL.
8. On October 30, 2006, the sole shareholder of the Filer adopted a special resolution approving the amalgamation of PTL with the Filer (the "Amalgamation"). The Amalgamation is one step in a transaction by which GBB, Messrs. Jean Bélanger, Christian Dollo, Martin Noël, André Noreau, Germain Ouellet and Henri Ouellet and Ms. Caroline Montminy (collectively, the "Privatisation Group") will privatise PTL (the "Transaction").
9. Prior to the effective date of the Amalgamation, the members of the Privatisation Group will transfer their shares of PTL to the Filer (collectively, the "Transfers") in exchange for shares of the Filer on a one-for-one basis. By virtue of the Transfers, the Filer will acquire 53.49% of the SVS and 99.23% of the MVS, thereby triggering the Take-over Bid Requirements, and in Québec, the Notice and Fees Requirements.
10. Under the terms of the amalgamation agreement dated October 30, 2006 between the Filer and PTL (the "Amalgamation Agreement"), both the SVS and the MVS will be converted on a one-for-one basis into redeemable class D preferred shares of the corporation resulting from the Amalgamation ("AmalCo"), except those SVS and MVS held by the Filer at the time of the Amalgamation, which will be cancelled without reimbursement of capital as a matter of corporate law. The redeemable class D preferred shares of AmalCo are redeemable on the first business day following the date of their issue at a redemption price of $3.00 per share. Also under the terms of the Amalgamation Agreement, the shares of the Filer will be converted into class A common shares of AmalCo.
11. The management proxy circular (the "Circular") for the Meeting (as hereinafter defined) included all information required under the Legislation including a description of the Transaction and, more particularly, of the Amalgamation. The Amalgamation was described as a mechanism for privatising PTL. To that end, it was specifically disclosed in the Circular that prior to the implementation of the Amalgamation, GBB caused the Filer, a special purpose subsidiary, to be incorporated under the Canada Business Corporations Act. It was also disclosed that GBB will transfer its 7,915,373 SVS and 843,000 MVS to the Filer. The 371,906 SVS held by the other Privatisation Group members will also be transferred to the Filer.
12. At the special meeting of the shareholders of PTL held on December 1, 2006 (the "Meeting"), the shareholders of PTL adopted a special resolution approving the Amalgamation, which special resolution was approved by a majority of over 99.9% of votes cast in person or by proxy.
Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met.
The decision of the Decision Makers under the Legislation is that the Requested Relief is granted.