The Securities Commission granted an exemption to United Corporations Limited (the Filer) from the requirement under subsection 2.32(4) of National Instrument 62-104 Take-Over Bids and Issuer Bids (NI 62-104), which stipulates that an issuer must take up all securities deposited and not withdrawn under an issuer bid before extending the bid if all terms and conditions have been met or waived. This exemption is in relation to the Filer’s issuer bid to purchase a portion of its issued and outstanding common shares through a modified Dutch auction procedure, with the intent to return up to $50,000,000 of capital to shareholders.
The Filer argued that the requirement to take up shares before extending the bid was incompatible with Regulation 14E of the U.S. Securities Exchange Act of 1934, which mandates prompt payment for shares at the expiry of the offer and does not allow for the extension process required by NI 62-104. The Filer needed the exemption to finalize the purchase price, considering all shares tendered before and during any extension period.
The exemption was granted on the condition that the Filer takes up and pays for the validly deposited shares as described in the issuer bid circular, complies with the requirements of Regulation 14E, and continues to qualify for the Liquid Market Exemption under Multilateral Instrument 61-101. Additionally, the Filer must issue a press release announcing the receipt of the exemption within one business day.
The decision was made by the Ontario Securities Commission, which served as the principal regulator, and the exemption was to be relied upon in multiple Canadian jurisdictions. The Filer’s shares are listed on the Toronto Stock Exchange under the symbol UNC, and the company is a reporting issuer in Ontario and Quebec. The Filer’s board believes that the offer is in the best interests of the company and its shareholders, as it provides value and increases equity ownership for non-tendering shareholders. The offer was not expected to affect the Filer’s ability to pursue business opportunities or growth.