Headnote
Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Take-over Bids – Exemption from the proportionate take-up requirements in section 97.2(1) of the Securities Act (Ontario) – Exemption from the extension take-up requirements in section 98.3(4) of the Securities Act (Ontario) – Dutch auction – An issuer conducting an issuer bid under a modified Dutch auction procedure requires relief from the requirements for proportionate take up, and to take up and pay for securities if all terms and conditions are met and the issuer bid is under-subscribed. The issuer is disclosing the maximum dollar amount of shares it will acquire under the bid, and the minimum and maximum amount it will pay for shares tendered; as a result, the potential for confusion is minimal – The issuer will comply with the U.S. regime in connection with the Offer.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c.S.5, as am., sections 97.2(1), 98.3(4) and 104(2)(c); OSC Rule 62-504, section 4.2(2).
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 Aastra Technologies Limited (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) that, in connection with the proposed purchase by the Filer of a portion of its outstanding common shares (the Shares) pursuant to an issuer bid (the Offer), the Filer be exempt from the following requirements in the Legislation (the Exemption Sought):
(a) to take up and pay for securities deposited pursuant to the Offer proportionately according to the number of securities deposited by each depositing security holder;
(b) to provide disclosure of the proportionate take-up and payment in the issuer bid circular (the Circular); and
(c) to not extend the Offer if all the terms and conditions of the Offer have been complied with or waived unless the Filer first takes up all Shares deposited and not withdrawn under the Offer.
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, Manitoba, Québec, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, the Northwest Territories, Nunavut and the Yukon.
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 corporation existing under the Canada Business Corporations Act and is a reporting issuer in each of the Jurisdictions. The Filer is not on the list of defaulting reporting issuers maintained by the securities regulator in each of the Jurisdictions that maintains such a list.
The Filer’s principal and registered office is located at 155 Snow Boulevard, Concord, Ontario, Canada, L4K 4N9.
The authorized share capital of the Filer consists of an unlimited number of preferred shares and an unlimited number of common shares (the “Common Shares”). As of February 21, 2012, 14,031,485 Common Shares and no preferred shares were issued and outstanding.
Shen Capital Corporation (“F. Shen Holdco”), a private company under the direction and control of Francis N. Shen, is the owner of 1,403,522 Common Shares, representing approximately 10.0% of the issued and outstanding Common Shares.
1615282 Ontario Limited (“A. Shen Holdco” and, together with F. Shen Holdco, the “Shen Holdcos”), a private company under the direction and control of Anthony P. Shen, is the owner of 427,406 Common Shares, representing approximately 3% of the issued and outstanding Common Shares.
The Filer’s Common Shares are listed on the Toronto Stock Exchange (“TSX”) under the symbol “AAH”.
On February 21, 2012, the closing price of the Common Shares on the TSX was C$19.94 and on such date the common shares had an aggregate market value of approximately C$279,787,810 based on such closing price. Based on such closing price, the Common Shares, excluding the Common Shares held by the Shen Holdcos, had an aggregate market value of approximately C$243,279,106.
The Filer made the Offer on February 27, 2012 by way of a modified Dutch auction procedure as follows:
(a) The Circular specifies the maximum aggregate purchase price of Common Shares ($50 million) which the Filer will purchase under the Offer (the Specified Dollar Amount);
(b) The Circular specifies the range of prices (not less than C$21.00 and not more than C$23.00 and in increments of C$0.20 within that range) within which the Filer is prepared to purchase the Common Shares (the Price Range);
(c) The Filer will fund the purchase of Common Shares pursuant to the Offer, together with the fees and expenses of the Offer, from available cash on hand;
(d) Each holder of Common Shares (collectively the Shareholders) wishing to tender to the Offer has the right either to:
(i) Specify the lowest price within the Price Range (an Auction Price) at which that Shareholder is willing to sell its tendered Common Shares (an Auction Tender), or
(ii) Elect to tender a number of Common Shares that will allow them to retain the Shareholder’s proportionate interest in the Filer following the completion of the Offer (a Proportionate Tender);
(e) Shareholders may make multiple Auction Tenders but not in respect of the same Common Shares (that is, shareholders may tender different common shares at different prices but cannot tender the same common shares at different prices); Shareholders who make a Proportionate Tender must tender all Common Shares beneficially owned by them to the Offer; Shareholders who make an Auction Tender may not make a Proportionate Tender; Shareholders who make a Proportionate Tender may not make an Auction Tender;
(f) any Shareholder who owns fewer than 100 Common Shares and tenders all of such Shareholder's Common Shares pursuant to an Auction Tender at or below the Purchase Price will be considered to have made an Odd-Lot Tender;
(g) the Filer will determine the purchase price payable per Common Share (the Purchase Price) based on the Auction Prices and the number of Common Shares specified in valid Auction Tenders; the Purchase Price will be the lowest price that enables the Filer to purchase that number of Common Shares tendered pursuant to valid Auction Tenders having an aggregate purchase price not to exceed an amount (the Auction Tender Limit Amount) equal to:
(i) the Specified Dollar Amount, less
(ii) the product of:
A