Securities Law & Instruments


Mutual Reliance Review System -- OSC Rule 61-501 -- take-over bid and subsequent business combination -- Rule 61-501 requires sending of information circular and holding of meeting in connection with second step business combination -- target's declaration of trust provides that a resolution in writing executed by unitholders holding more than 66 2/3% of the outstanding units is valid and binding as if such voting rights had been exercised in favour of such resolution at a meeting of Unitholders -- second step business combination to be subject to minority approval, calculated in accordance with section 8.2 of Rule 61-501 -- relief granted from requirement that information circular be sent and meeting be held.

Applicable Legislative Provisions

OSC Rule 61-501 Insider Bids, Issuer Bids, Business Combinations and Related Party Transactions, ss. 4.2, 9.1.

April 27, 2007
















The local securities regulatory authority or regulator (the "Decision Maker") in each of Ontario and Quebec (the "Jurisdictions") has received an application from Liquor Stores Income Fund (the "Applicant"), in connection with a take-over bid (the "Bid") for Liquor Barn Income Fund ("LB"), for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that the requirements of the Legislation that:

1. the Subsequent Acquisition Transaction (as defined below) be approved at a meeting of the unitholders of LB ("LB Unitholders"); and

2. an information circular be sent to LB Unitholders in connection with the Subsequent Acquisition Transaction;

be waived (the "Requested Relief").

Under the Mutual Reliance Review System for Exemptive Relief Applications:

1. the Ontario Securities Commission ("OSC") is the principal regulator for this application; and

2. 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 representations by the Applicant:

1. The Applicant is a trust formed under the laws of the Province of Alberta. The Applicant's head and registered offices are located in Edmonton, Alberta.

2. The Applicant has prepared and sent an offer and take-over bid circular ("Circular") to the LB Unitholders in connection with the Bid.

3. The outstanding trust units of LB ("LB Units") are held by CDS Clearing and Depository Services Inc. in book-entry only form.

4. The terms of the Bid include the following:

(a) the Bid is for all of the issued and outstanding LB Units, including all LB Units that may become outstanding after the date of the Bid upon the exercise of options, warrants or other conversion or exchange rights, on the basis of 0.53 of a trust unit of the Applicant ("Applicant Units") for each one LB Unit (the "Exchange Ratio");

(b) one of the conditions of the Bid is that the number of LB Units held by LB Unitholders who elect to either tender to the Bid or participate in the Merger Transaction (as defined below), together with the number of LB Units held as of the expiry time of the Bid by or on behalf of the Applicant or its subsidiaries, if any, together with any separately voted special voting units of LB ("LB Special Voting Units"), represent more than 66 2/3% of the then outstanding LB Units and LB Special Voting Units (collectively, the "Voting Units");

(c) in the event that the Applicant takes up and pays for LB Units pursuant to the Bid, the Applicant intends to proceed with a merger transaction (the "Merger Transaction") which would involve: (i) the transfer of all of the assets and liabilities of LB to the Applicant in exchange for Applicant Units and special voting units of the Applicant ("Applicant Special Voting Units"), and (ii) the distribution of such Applicant Units and Applicant Special Voting Units to the holders of LB Units and LB Special Voting Units (the "Voting Unitholders"), as applicable, upon a redemption of their LB Units and LB Special Voting Units based on the Exchange Ratio, on a tax deferred "roll-over" basis (and the cancellation of any such Applicant Units received by the Applicant itself) (the "Subsequent Acquisition Transaction"), provided that if the Subsequent Acquisition Transaction is not pursued in such form, the Applicant has reserved the right under the Bid, subject to compliance with applicable laws, to acquire the assets of LB or the balance of the LB Units as soon as practicable by way of an arrangement, amalgamation, merger, reorganization, consolidation, recapitalization, redemption or other transaction involving the Applicant, an affiliate of the Applicant and/or its subsidiaries and LB, an affiliate of LB, and/or its subsidiaries;

(d) in order to effect the Subsequent Acquisition Transaction, rather than seeking Voting Unitholder approval at a special meeting of the Voting Unitholders to be called for such purpose, the Applicant intends to rely on section 12.10 of the Amended and Restated Declaration of Trust of LB (the "LB DOT"), which specifies that a resolution in writing circulated to all Voting Unitholders and executed by Voting Unitholders holding more than 66 2/3% of the outstanding Voting Units entitled to be voted on such resolution, will be as valid and binding as if such Voting Unitholders had exercised at that time all of their voting rights in favour of such resolution at a meeting of Voting Unitholders duly called for that purpose (the "Written Resolution").

5. Notwithstanding section 12.10 of the LB DOT, the Legislation requires that the Subsequent Acquisition Transaction be approved at a meeting of LB Unitholders called for that purpose.

6. To effect the Subsequent Acquisition Transaction, the Applicant will obtain minority approval, as that term is defined in the Legislation, calculated in accordance with the terms of section 8.2 of OSC Rule 61-501 and section 8.2 of AMF Regulation Q-27 (the "Minority Approval"), albeit not at a meeting of LB Unitholders, but by Written Resolution.

7. The Circular provided to LB Unitholders in connection with the Bid contains all disclosure required by applicable securities laws, including without limitation the take-over bid provisions and form requirements of the securities legislation in the Jurisdictions and the provisions of OSC Rule 61-501 relating to the disclosure required to be included in a disclosure document for a formal bid in respect of a second-step business combination.


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 provided that Minority Approval shall have been obtained, albeit not at a meeting of LB Unitholders, but by Written Resolution.

"Naizam Kanji"
Manager, Mergers & Acquisitions
Ontario Securities Commission