The Ontario Securities Commission granted an exemption to E-L Financial Corporation 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). This requirement states that an issuer must not extend a take-over bid unless it first takes up all securities validly deposited and not withdrawn if all terms and conditions of the offer have been met or waived. The exemption was sought in connection with the Filer’s issuer bid to purchase a portion of its issued and outstanding common shares through a modified Dutch auction, with the intent to return up to $100,000,000 of capital to shareholders.
The Filer is a reporting issuer in all Canadian provinces, with its shares listed on the Toronto Stock Exchange. The board believes that the offer is in the best interests of the company and its shareholders, as it provides value and reflects the underlying value of the company better than the recent trading price.
The exemption was granted subject to conditions, including that the Filer must take up and pay for, or deal with, the shares as described in the issuer bid circular and comply with the Liquid Market Exemption under Multilateral Instrument 61-101. Additionally, the Filer must comply with Regulation 14E under the U.S. Securities Exchange Act of 1934 concerning the offer and promptly announce the receipt of the exemption.
The decision was made considering the Filer’s representations, including its corporate status, share structure, the board’s rationale for the offer, the offer’s terms, funding sources, and the impact on shareholders and the market. The Filer’s reliance on the Liquid Market Exemption was based on the liquidity of the market for its shares and an opinion provided by Cormark Securities Inc. The exemption allows the Filer to extend the offer without first taking up all tendered shares, facilitating the determination of the final purchase price while accommodating additional tenders during the extension period.