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 stipulated in subsection 2.32(4) of National Instrument 62-104 Take-Over Bids and Issuer Bids (NI 62-104). The issuer, Economic Investment Trust Limited, initiated an issuer bid to purchase a portion of its outstanding common shares through a modified Dutch auction, with the intention to enhance shareholder value and capitalize on the shares’ trading price, which the Board believes does not reflect the company’s underlying value or growth prospects.
The exemption was granted under the condition that the issuer complies with the terms set out in the bid circular and the requirements of Regulation 14E under the U.S. Securities Exchange Act of 1934. The issuer must also take up and pay for, or otherwise deal with, the shares as described in the circular, be eligible to rely on the Liquid Market Exemption under Multilateral Instrument 61-101, and issue a press release announcing the exemption within one business day of receiving it.
The decision was made considering the issuer’s representations, including its financial position, the structure of the bid, the confidentiality of tendered shares, and the impact on the market liquidity post-bid. The issuer’s shares are listed on the Toronto Stock Exchange, and the bid was subject to U.S. regulations due to cross-border implications. The exemption allows the issuer to extend the bid without first taking up all tendered shares, enabling a final determination of the purchase price after considering all shares tendered during the extension period.