The Securities Commission granted an exemption to an issuer from the requirement to take up all securities deposited under an issuer bid before extending the bid, as outlined in subsection 2.32(4) of National Instrument 62-104 Take-Over Bids and Issuer Bids (NI 62-104). This decision was made in connection with the issuer’s modified Dutch auction procedure for repurchasing a portion of its outstanding common shares.
The issuer, a reporting issuer in Ontario and a foreign private issuer in the United States, proposed to buy back up to US$400,000,000 of its common shares at a price range of US$8.75 to US$10.25 per share. The issuer intended to fund the buyback from available cash on hand and believed the repurchase would provide value to shareholders and was in the best interests of the company.
The exemption was necessary because the issuer could not determine the purchase price per share until all tenders were known, which would not be possible until after the potential extension of the offer. Without the exemption, the issuer would be unable to extend the offer if it was undersubscribed, as the rules would require it to first take up all securities deposited and not withdrawn.
The exemption was granted subject to conditions that the issuer takes up and pays for the deposited shares as described in the offer circular, remains eligible for the Liquid Market Exemption under Multilateral Instrument 61-101, and complies with the requirements of U.S. securities laws applicable to the offer. 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.