The Securities Commission granted CI Financial Corp. (the Filer) an exemption from the requirement to take up all securities deposited under their issuer bid before extending the bid, as per subsection 2.32(4) of National Instrument 62-104 Take-Over Bids and Issuer Bids (NI 62-104). The Filer sought this exemption in relation to its proposed purchase of a portion of its issued and outstanding common shares via a modified Dutch auction, with the intent to provide value to shareholders and improve ownership for non-tendering shareholders.
The Filer is a corporation in good standing under Ontario’s Business Corporations Act, with its shares listed on the Toronto Stock Exchange. The offer was not contingent on financing, as the Filer would use available cash and credit facilities.
The auction allowed shareholders to tender shares at specified prices within a defined range or to make purchase price tenders without specifying a price. The Filer would determine the purchase price after the offer’s expiration, aiming to buy the maximum number of shares without exceeding the $100,000,000 cap. Provisions were made for proportional purchases and the treatment of odd lot holders.
The exemption was necessary because the final purchase price could not be determined until after the expiry of the offer, which precluded the Filer from taking up and paying for shares before any potential extension of the offer. The exemption was granted on the condition that the Filer would adhere to the auction terms disclosed in the Circular, remain eligible for the liquid market exemption, and issue a press release announcing the exemption within one business day of receipt.
The decision was supported by the Filer’s compliance with relevant securities legislation and the Ontario Securities Commission’s satisfaction that the exemption met the legislative test for such a decision.