The Securities Commission has granted an exemption to MHR Fund Management LLC (the Filer) and associated entities (collectively, the MHR Group) from certain take-over bid requirements under National Instrument 62-104 Take-Over Bids and Issuer Bids (NI 62-104). This exemption allows the MHR Group to calculate thresholds for normal course purchases of Telesat Corporation’s (the Company) Class A common shares and Class B variable voting shares (collectively, the Listed Shares) on an aggregate basis rather than separately for each class.
The Company’s capital structure, designed to maintain its status as Canadian-controlled, features two classes of shares that are economically equivalent but distinguishable by the Canadian status of the holder. These shares are inter-convertible based on changes in the holder’s Canadian status and trade under the same ticker symbol and CUSIP.
Under normal circumstances, acquiring 20% or more of a class of shares would trigger take-over bid requirements. However, due to the unique capital structure and the inability to determine the exact number of each class of shares outstanding at the time of purchase, the Filer sought relief from these requirements.
The exemption was granted subject to several conditions, including that the Company’s previously obtained relief remains effective, there are no changes to the capital structure, and the Listed Shares continue to trade under the same ticker symbol and CUSIP. Additionally, the MHR Group must comply with the normal course purchase exemption in section 4.1 of NI 62-104, with the modification that the 5% threshold for purchases applies to the combined total of Class A and Class B shares, rather than on a per-class basis.
The decision was made by the Ontario Securities Commission, acting as the principal regulator, and is applicable across multiple Canadian jurisdictions under the Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions.