The Ontario Securities Commission granted an exemption to VM Hotel Acquisition Corp. (the Filer), a special purpose acquisition corporation (SPAC), from the minority approval and formal valuation requirements typically mandated by Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101). This decision was made in the context of the Filer’s proposed qualifying acquisition, which involved a related party transaction.
The Filer, with no operations or revenues until its qualifying acquisition, has Class A restricted voting shares with redemption rights and Class B shares without such rights. The Class A shares, listed on the Toronto Stock Exchange, have their gross proceeds placed in escrow to fund the qualifying acquisition and potential redemptions. Class B shares, held by sponsors and certain third parties, do not access the escrow funds and are not publicly traded.
The exemption was conditional upon the proposed transaction qualifying for the 25% market capitalization exemption, which would apply if the Class A restricted voting shares were considered the Filer’s only outstanding equity securities. The Filer was required to disclose the exemption and its implications in any related documentation provided to shareholders.
This decision was based on the understanding that the Class A shares, unlike the Class B shares, do not carry a residual right to participate in the Filer’s assets upon liquidation or dissolution. The exemption aimed to facilitate the Filer’s qualifying acquisition while recognizing the unique structure and purpose of a SPAC.