The Securities Commission has granted an exemption to a corporation from the requirement to obtain separate minority approval from holders of its common shares and proportionate voting shares for a proposed business combination transaction. The exemption is based on the rationale that the two classes of shares were intended to be identical except for the proportionate rights, and there is no difference in interest between the holders of each class in connection with the transaction. The exemption is contingent on several safeguards, including the establishment of an independent committee, obtaining fairness opinions, and approval by the Court.
The relevant laws underpinning the outcome include Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, specifically sections 8.1(1) and 9.1(2). The decision also references the Business Corporations Act (British Columbia) and the corporation’s constating documents, which provide that shareholders will vote as a single class except in certain circumstances not present in the proposed transaction. The exemption allows for the minority approval to be obtained from all disinterested shareholders voting together as a single class, provided that specific mechanisms are implemented and remain in place, including holding a special meeting, preparing and delivering an information circular in accordance with securities law, and including fairness opinions in the information circular.