Securities Law & Instruments

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- Mutual Reliance Review System for Exemptive Relief Applications -- take-over bid by German company that is not a reporting issuer in any Canadian jurisdiction -- filer acquiring target existing under the laws of Germany -- de minimis exemption not available -- offeror cannot conclusively determine how many Canadian shareholders there are because target issued bearer securities and does not maintain a share register -- evidence suggests the number of Canadian shareholders less than the de minimis threshold -- Germany not recognized by the Commission for the purposes of de minimis exemption -- relief granted as take-over bid conducted in accordance with the laws of Germany providing protections to target shareholders -- all material provided to foreign shareholders to be provided to Ontario shareholders -- all shareholders treated equally.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 93(1)(e), 95 through 100, 104(2)(c).

Recognition Orders Cited

In the Matter of the Recognition of Certain Jurisdictions (Clauses 93(1)(e) and 93(3)(h) of Act) (1997) 20 OSCB 1035.

November 9, 2007

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUÉBEC, NOVA SCOTIA,

NEW BRUNSWICK AND NEWFOUNDLAND

AND LABRADOR

(the "Jurisdictions")

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

MEIF II ENERGIE BETEILIGUNGEN

GMBH & CO. KG

(the "Filer")

 

MRRS DECISION DOCUMENT

Background

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 the formal take-over bid requirements contained in the Legislation, including 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 (collectively, the Take-over Bid Requirements) shall not apply to the proposed offer (the Offer) by the Filer for the acquisition of all of the issued and outstanding shares (the Target Shares) in the capital of Techem AG (the Target) not already held by the Filer (the Requested Relief).

Under the Mutual Reliance Review System for Exemptive Relief Applications (the MRRS):

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision.

Representations

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

1. The Filer is a limited partnership incorporated under the laws of Germany. The Filer's registered office is located in Frankfurt, Germany.

2. The Filer is not a reporting issuer or the equivalent in any of the Jurisdictions. The Filer's securities are not listed or quoted for trading on any Canadian stock exchange or market or anywhere else.

3. The Target is a German stock corporation with its registered office in Eschborn, Germany. The Target is one of Europe's leading providers of services to the housing and real estate industries.

4. The Target's issued share capital registered in the commercial register amounts to €24,711,924 and is divided into 24,711,924 bearer shares without nominal par value, each representing a proportionate amount of the share capital of €1. The Target Shares are admitted to trading on the official market (Prime Standard) of the Frankfurt Stock Exchange, under ISIN DE0005471601 (WKN 547 160). The Target Shares are also traded on XETRA and on the unofficial regulated markets of the stock exchanges in Hamburg, Stuttgart, Düsseldorf, Berlin and Munich. The shares have been included in the MDAX index.

5. The Target is not a reporting issuer or equivalent in any of the Jurisdictions. The Target's securities are not listed or quoted for trading on any Canadian stock exchange or market.

6. In 2006, the Filer made an unsuccessful offer to acquire all of the issued and outstanding shares of the Target.

7. On October 22, 2007, the Filer announced its intention to make a voluntary public tender offer for the acquisition of all of the issued and outstanding Target Shares for cash consideration. The Filer intends to offer €60.00 per Target Share in cash. The Offer will be unconditional except for the merger clearance condition as set forth in the Offer Document. As of October 22, 2007, the Filer owned 5,112,931 Target Shares (approximately 20.69%).

8. The Filer entered into an agreement dated November 10, 2006 with Macquarie Luxembourg Investment S.à r.l. (MLIS), a limited liability company incorporated under the laws of the Grand Duchy of Luxembourg, with registered office in Luxembourg, who currently owns 1,095,822 Target Shares (approximately 4.43%), which provides that MLIS will exercise the voting rights in its Target Shares according to the direction of the Filer and the Filer's sole limited partner. Pursuant to this agreement, MLIS also agreed to grant to the Filer and the Filer's sole limited partner the right to acquire the Target Shares held by MLIS by exercising a preemptive right, subject to certain conditions.

9. Since October 21, 2007, the Filer has entered into various agreements with 14 different counter-parties (none of which are resident in the Jurisdictions) pursuant to which the Filer has acquired or agreed to acquire a further 10,885,676 Target Shares, representing approximately 44% of the outstanding Target Shares. On October 26, 2007, the Filer also acquired Target Shares on the Frankfurt Stock Exchange. The Filer paid an average of €57.9999 for 143,861 Target Shares with the lowest consideration paid being €57.99 and the highest being €58.00 per Target Share. These newly acquired Target Shares, together with the 20.69% of the Target Shares previously held by the Filer and the 4.43% of the Target Shares held by MLIS, result in the Filer holding or having agreements to acquire approximately 69.17% of the Target Shares. In addition, as permitted under German law, the Filer may continue purchasing additional Target Shares over the markets on which the Target Shares are traded.

10. The Offer is being made and the Offer Document reflecting the terms of the Offer is being prepared exclusively in accordance with the laws of the Federal Republic of Germany (in particular, in compliance with the German Securities Acquisition and Takeover Act and related statutory regulations), and in accordance with the provisions of Regulation 14E of the U.S. Securities Exchange Act of 1934 applicable to this Offer and applicable exemptions.

11. As permitted by German law, the Target has issued bearer securities and does not maintain a share register. Accordingly, any information about the Target Shares held by shareholders in Canada can only be determined on a limited enquiry basis. Pursuant to those inquiries, residency information was obtained in respect of 54% of the total outstanding shares in the capital of the Target. Based on such enquiry, the Filer believes that as of October 21, 2007, there were two (2) holders of shares in the capital of the Target resident in Canada, holding in total 2,300 Target Shares representing approximately 0.01% of the entire issued share capital of the Target. The Filer believes that both of these shareholders are resident in the Province of Ontario. As a result of the fact that the Target has issued bearer shares, the Filer is unable to determine conclusively where the holders of the Target Shares reside.

12. The Offer Document has been submitted for review to the applicable securities regulatory authority in Germany. It is expected that the Offer Document will be published and made available to the holders of the Target Shares immediately after approval by the German regulator, which is currently expected on or around November 5, 2007. In accordance with German law, the Offer Document (and an English convenience translation) will be available on the Internet at http://www.macquarie.com/meif2energie and a notification regarding the publication of the Offer Document will be published in the Electronic Federal Gazette also specifying where and how the shareholders may obtain a copy of the Offer Document free of charge.

13. Copies of the Offer Document and its English translation will be available free of charge at the financial printer, RR Donnelley Frankfurt and RR Donnelley New York. An announcement of the publication of the Offer Document and the availability of its English convenience translation will also be made in the U.S. edition of The Wall Street Journal in the United States of America, and will indicate the relevant contact information for requesting the Offer Document.

14. While the Filer will also publish a non-binding English convenience translation of the Offer Document, the English translation has not been reviewed by the German Federal Financial Supervisory Authority, and the German Offer Document shall be the only binding offer document. Beyond that, as permitted under German law, the Filer does not expect to deliver any materials to the holders of the Target Shares in general (as the Target has issued bearer shares and does not maintain a share register or other record of the addresses of its shareholders). However, in the event that any material relating to the Offer is sent by the Filer generally to holders of the Target Shares in Germany, such material will also be sent to holders of Target Shares residing in the Jurisdictions (if addresses are known), along with an English translation for convenience purposes.

15. A public announcement in a national Canadian newspaper and in a French language newspaper widely distributed in Québec, made at the same time as the public announcement in the national German newspaper or as soon as practicable after issuance of this order, will specify where and how the shareholders may obtain a copy of the Offer Document or an English convenience translation free of charge. As soon as practicable after such date, the Filer will also file a copy of the Offer Document with the local securities regulatory authority or regulator in each of the Jurisdictions.

16. In accordance with German law (the home jurisdiction of both the Filer and the Target), the Offer treats all shareholders (including Canadian holders) equally.

17. The de minimis take-over bid exemption, as provided for in the Legislation, is not available to the Filer because the Offer is not being made in compliance with the laws of a jurisdiction that is recognized by the Decision Maker in each of the Jurisdictions for this purpose. Also, because the Target does not maintain a share register, the Filer is unable to determine conclusively the number of holders of the Target Shares resident in each of the Jurisdictions, or the number of Target Shares held by any such persons.

Decision

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:

(a) the Offer and all amendments to the Offer are made in compliance with the laws of the Federal Republic of Germany;

(b) any material relating to the Offer that is sent by the Filer generally to the holders of the Target Shares in Germany will be sent by the Filer to the holders of the Target Shares resident in the Jurisdictions (if addresses are known), together with an English convenience translation, and copies thereof filed with the Decision Maker in each Jurisdiction; and

(c) the Filer makes a public announcement in a national Canadian newspaper and in a French newspaper that is widely circulated in Québec specifying where and how holders of the Target Shares any of in the Jurisdictions may obtain a copy of the Offer Document (or an English convenience translation) free of charge, and files copies thereof with the Decision Maker in each Jurisdiction.

"Robert L. Shirriff"
Commissioner
Ontario Securities Commission
 
"James E. A. Turner"
Commissioner
Ontario Securities Commission