The Ontario Securities Commission granted Teck Resources Limited an exemption from the requirement to obtain minority approval from holders of every class of affected securities for a proposed arrangement. This arrangement involves introducing a sunset provision to the issuer’s multiple voting shares, leading to the collapse of the dual-class share structure in exchange for a fraction of a subordinate voting share per multiple voting share.
The exemption was granted under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101), which typically requires minority approval for such transactions. However, the Commission determined that there was no conflict of interest between related parties and other multiple voting shareholders, as all would be treated identically and receive identical consideration. Additionally, no related party received any preferential treatment, payment, or inducement in connection with the arrangement.
Instead of seeking minority approval from multiple voting shareholders, Teck Resources opted to seek approval from a majority of subordinate voting shareholders, excluding related party multiple voting shareholders, in addition to the required corporate law approvals.
The exemption was subject to conditions, including that Teck Resources obtain modified approvals for the arrangement and that all shareholders, including those with subordinate voting shares, be treated equally in a related spin-off transaction. The decision also required that the information circular for the shareholder meeting include all necessary disclosures and fairness opinions.
The relevant legislative provisions cited include sections 4.5, 8.1, and 9.1(2) of MI 61-101. The decision was made with the understanding that the arrangement would be fair to all shareholders and that there would be no collateral benefits associated with the transaction.