Transcontinental Inc

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Exemption from the requirement to file a business acquisition report under Part 8 of National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102") -- Relief granted to a filer from the requirement to file a business acquisition report under Part 8 of NI 51-102 in connection with the Filer's acquisition. The acquisition is not significant under the asset and investment tests in section 8.3(2) of NI 51-102, but is significant under the profit or loss test. The Filer submitted that the application of the profit or loss test to the acquisition produces anomalous results because the significance of the acquisition is exaggerated out of proportion to its significance on an objective basis in comparison to the results of the asset and investment tests. Relief granted based on the Filer's representations that from a practical, commercial, business or financial perspective, the acquisition should not be considered as a significant acquisition for the Filer.

Applicable Legislative Provisions

National Instrument 51-102 Continuous Disclosure Obligations.

[TRANSLATION]

July 11, 2014

IN THE MATTER OF THE SECURITIES LEGISLATION OF QUÉBEC AND ONTARIO AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF TRANSCONTINENTAL INC. (THE "FILER")

DECISION

Background

The securities regulatory authority or regulator in Quebec and Ontario (the "Dual Exemption Decision Makers") have received an application (the "Application") from the Filer for a decision under the securities legislation of those jurisdictions (the "Legislation") to grant relief from the requirement in Part 8 of Regulation 51-102 respecting Continuous Disclosure Obligations ("Regulation 51-102") to file a business acquisition report (a "BAR") in respect of the Filer's Acquisition (as defined below) (the "Exemption Sought").

Furthermore, the securities regulatory authority or regulator in Quebec and Ontario (the "Coordinated Decision Makers") have received an application from the Filer that the Application and the supporting materials provided to the Coordinated Decision Makers be declared inaccessible (the "Confidentiality Sought").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a hybrid application):

a) the Autorité des marchés financiers is the principal regulator for this application;

b) the Filer has provided notice that Subsection 4.7(1) of Regulation 11-102 respecting Passport System ("Regulation 11-102") is intended to be relied upon in each of the provinces of Canada other than Ontario;

c) the decision is the decision of the principal regulator and the decision evidences the decision of the securities regulatory authority or regulator in Ontario; and

d) the decision evidences the decision of each Coordinated Decision Maker.

Interpretation

Terms defined in Regulation 14-101 respecting Definitions and Regulation 11-102 have the same meaning if used in this decision, unless otherwise defined herein.

Representations

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

1. The Filer was incorporated under the Canada Business Corporations Act pursuant to a Certificate of Incorporation dated March 3, 1978, as amended effective October 7, 1988, April 10, 2003 and October 1, 2009.

2. The Filer's head office is located at 1 Place Ville Marie, Suite 3315, Montréal, Québec, Canada, H3B 3V2.

3. The Filer is a reporting issuer in all of the provinces of Canada. At the time of the Application, the Filer is not in default of securities legislation in any of the provinces of Canada.

4. The Filer's Class A Subordinate Voting Shares (the "Class A Shares"), Class B Shares (the "Class B Shares") and Preferred Shares, Series D (the "Series D Preferred Shares") are listed for trading on the Toronto Stock Exchange (the "TSX") under the ticker symbols TCL.A, TCL.B and TCL.PR.D, respectively.

5. As at the end of the Filer's most recently completed fiscal year ended October 31, 2013 ("Fiscal 2013"), the Filer had 63,188,951 Class A Shares, 14,832,816 Class B Shares and 4,000,000 Series D Preferred Shares issued and outstanding, representing a total market capitalization of approximately $1.4 billion based on the closing prices in effect on the TSX as at the same date.

6. As at October 31, 2013, the Filer's consolidated assets, as shown in the Filer's consolidated audited financial statements for Fiscal 2013, represented approximately $1.859 billion.

7. The Filer completed the acquisition (the "Acquisition") of the assets (the "Assets") of Capri Packaging, a division of Schreiber Foods, Inc. (the "Seller"), on May 3, 2014.

8. Under the Acquisition, the Filer is acquiring the Assets from the Seller for a total purchase price of U.S.$133.0 million (or $146.1 million).

9. Under Part 8 of Regulation 51-102, the Filer is required to file a BAR for any "significant acquisition" (as such term is defined under Part 8 of Regulation 51-102) that it completes and such BAR must contain certain financial statements of the acquired business.

10. The Acquisition is not a "significant acquisition" under the "asset test".

11. The Acquisition is not a "significant acquisition" under the "investment test".

12. The Acquisition would be a "significant acquisition" under the "profit or loss test". Even when applying the optional signification tests or the alternative applications available under subsections 8.3(3), 8.3(4), 8.3(8) and 8.3(9), the Acquisition would still represent a "significant acquisition" requiring the filing of a BAR under the "profit or loss test".

13. The Filer has provided the principal regulator with additional measures which further demonstrate the insignificance of the Acquisition to the Filer and which are generally consistent with the results of the "asset test" and the "investment test".

14. From a commercial, business or financial perspective, the Acquisition is not a significant acquisition. In the present context, the "asset test" and the "investment test" more accurately reflect the significance of the Acquisition.

15. The communication of the Application and the supporting materials could result in serious prejudice to the Seller.

Decision

Each of the principal regulator, the securities regulatory authority or regulator in Ontario and the Coordinated Decision Makers is satisfied that the decision meets the test set out in the Legislation for the relevant regulator or securities regulatory authority to make the decision.

The decision of the Dual Exemption Decision Makers under the Legislation is that the Exemption Sought is granted.

"Lucie J. Roy"
Senior Director, Corporate Finance
Autorité des marchés financiers

Furthermore, the decision of the Coordinated Decision Makers is that the Confidentiality Sought is granted.

"Benoit Longtin"
Assistant Corporate Secretary
Autorité des marchés financiers