Headnote
NP 11-203 Application for relief from Section 53 and Section 74(1) of the Securities Act (Ontario) – exemption from prospectus requirement in connection with first trade of shares – issuer is not a reporting issuer in any jurisdiction in Canada – conditions of the exemption in section 2.14 of National Instrument 45-102 Resale of Securities not fully met as Canadians held 12.35% of the total issued and outstanding securities of the company – 1.13% of the total number of owners, directly or indirectly of the securities of the company are Canadian – relief granted subject to conditions, including that the first trade must be made through an exchange or market outside of Canada or to a person or company outside of Canada.
Applicable Legislative Provisions
Securities Act, R.SO. 1990, c. S.5, as am., ss.53, 74(1)
National Instrument 45-102 – Resale of Securities
September 11, 2009
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the “Jurisdiction”)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF HAMMERSON PLC (THE “FILER”)
DECISION
BACKGROUND
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the “Legislation”) pursuant to Part 3 of National Instrument 45-102 Resale of Securities (“NI 45-102”) for an exemption (the “Requested Relief”) from prospectus requirements for the first trade of ordinary shares of the Filer expected to be distributed to shareholders of the Filer resident in each of the provinces of Canada under available “dividends and distributions” exemptions in connection with a scrip dividend scheme being launched by the Filer to provide shareholders with the option of selecting ordinary shares (“Shares”) of the Filer in lieu of cash in respect of an interim dividend declared by the directors of the Filer on August 3, 2009 (the “Scrip Scheme”) and in connection with similar scrip dividend schemes expected to be launched by the Filer from time to time (together with the Scrip Scheme, the “Scrip Schemes”).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 - Passport System (“MI 11-102”) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories and Nunavut.
INTERPRETATION
Terms defined in National Instrument 14-101 - Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
REPRESENTATIONS
This decision is based on the following facts represented by the Filer:
The Filer is a public company incorporated under the laws of England and Wales whose shares are listed on the London Stock Exchange (the “LSE”) and Euronext Paris. The Filer is a European property developer and manager, primarily in the shopping centre, retail parks and office space.
The Filer is not a reporting issuer in any jurisdiction in Canada and currently has no intention of becoming a reporting issuer. The Filer is in compliance with all securities laws of the United Kingdom and in any other jurisdiction where the Filer is considered a reporting issuer, or equivalent thereof. In addition, the Filer is in good standing with the listing rules of the United Kingdom Listing Authority as well as the rules of the LSE and Euronext.
The Filer is not in default under securities legislation of any jurisdiction in Canada.
The Filer is currently launching the Scrip Scheme in accordance with the laws of the United Kingdom and the listing rules of the United Kingdom Listing Authority as well as the rules of the London Stock Exchange and Euronext, Paris and in connection therewith will offer cash or Shares in lieu of a cash payment to shareholders in Canada in connection with an interim dividend declared by the directors of the Filer on August 3, 2009.
At the date hereof, the Filer has issued and outstanding 696,182,092 Shares. After enquiry, the Filer believes that approximately 12.35% of the Shares are currently held by residents of Canada.
The Shares are ordinary shares of the Filer, a UK plc. “Ordinary shares” are similar in nature to what would generally be referred to as common shares in Canada. The Shares are not convertible securities.
Upon completion of the Scrip Scheme, if all shareholders of the Filer accept Shares instead of cash, the Filer expects to issue approximately 12,221,000 additional Shares (an increase of 1.8% over the current issued share capital). Assuming all Canadian shareholders elect to receive Shares under the Scrip Scheme, approximately 1,509,293 more Shares would be issued to Canadian shareholders. The percentage of Shares held by Canadian shareholders would remain constant at 12.35% assuming all shareholders of the Filer accept Shares instead of cash under the Scrip Scheme. In the unlikely event that only Canadian shareholders elect to receive Shares and all other shareholders elect to receive cash under the Scrip Scheme, the percentage of Shares held by Canadian shareholders would increase to approximately 12.54%. The final figures will not be known until shareholders have elected to receive cash or Shares under the Scrip Scheme.
In the absence of an order granting relief, the first trade of Shares acquired in connection with the Scrip Schemes by a shareholder of the Filer resident in any of the Jurisdictions will be deemed to be a distribution pursuant to section 2.6 of NI 45-102 unless, among other things, the Filer has been a reporting issuer for 4 months immediately preceding the trade in one of the jurisdictions set forth in Appendix B to NI 45-102.
As a result of the anticipated aggregate number of Shares to be held by resident Canadians, shareholders of the Filer who elect to receive Shares in lieu of cash under the Scrip Schemes are not expected to be able to use the first trade exemption set out at section 2.14 of NI 45-102 since residents of Canada are expected to hold in aggregate more than 10% of the Shares.
The directors and officers of the Filer believe, after due inquiry, that approximately 1.13% of the total number of holders, directly or indirectly, of the Shares are resident in Canada. On this basis, the Filer meets the requirements set forth in section 2.14(1)(b)(ii) of NI 45-102.
The Filer will apply to the LSE and Euronext Paris to have all of the Shares issued under the Scrip Schemes admitted for trading on the LSE and Euronext, Paris. Upon approval by the LSE and Euronext Paris, such securities will then be publicly traded on the LSE and Euronext Paris.
No market for the Shares exists in Canada and none is expected to develop. It is intended that any resale of the Shares distributed under the Scrip Schemes by Canadian residents be effected through the facilities of the London Stock Exchange or Euronext Paris or any other exchange or market outside of Canada on which the Shares may be quoted or listed at the time that the trade occurs or to a person or company outside of Canada, in accordance with the rules and regulations of such foreign market.
The Filer is and will be subject to reporting obligations of the LSE and Euronext Paris. Holders of Shares resident in Canada will receive copies of all shareholder materials provided to all other holders of Shares.
DECISION
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Requested Relief is granted provided that the trade is made through an exchange, or a market, outside of Canada or to a person or company outside of Canada.
“James Turner” VICE-CHAIR Ontario Securities Commission
“Mary Condon” Commissioner Ontario Securities Commission