The Ontario Securities Commission granted Bridgemarq Real Estate Services Inc. (the Filer) an exemption from certain minority approval and formal valuation requirements for related party transactions involving Residential Income Fund L.P. (the Partnership) or its subsidiaries. This exemption is based on the Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101), specifically sections 5.5(a), 5.7(1)(a), and 9.1.
The exemption allows the Filer to include the indirect equity interest held by Brookfield BBP (Canada) Holdings LP in the form of exchangeable Class B limited partnership units (Exchangeable LP Units) when calculating the Filer’s market capitalization. This calculation is relevant for determining eligibility for the 25% market capitalization exemption for certain related party transactions.
Key conditions of the exemption include:
1. The transaction must qualify for the Transaction Size Exemption under MI 61-101 if the Exchangeable LP Units were treated as convertible into Restricted Voting Shares of the Filer.
2. No material changes to the terms of the Exchangeable LP Units or the Special Voting Share.
3. Compliance with the rules and policies of the Toronto Stock Exchange (TSX) or other relevant exchange.
4. Disclosure requirements in material change reports and annual information forms, explaining the granted exemption and its implications on the 25% threshold for minority approval and formal valuation requirements.
This decision is consistent with the treatment of operating entities of income trusts and reflects the economic equivalence of the Exchangeable LP Units to the Filer’s Restricted Voting Shares. It acknowledges the need to consider the full equity value of the Filer, including Brookfield’s interest, for a fair assessment of transaction sizes relative to the Filer’s market capitalization.