February 18, 2022
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 BHP GROUP 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 (the Legislation) for an exemption (the Exemption Sought) from the prospectus requirement in section 53 of the Securities Act (Ontario) in connection with the proposed distribution (the Dividend Distribution) by the Filer of ordinary shares (Woodside Shares) of Woodside Petroleum Ltd. (Woodside), by way of a dividend in specie to holders (Filer Shareholders) of shares of ordinary shares of the Filer (Filer Shares) resident in Canada (Filer Canadian Shareholders).
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 subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of the other provinces and territories of Canada.
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 an Australian corporation and is a global resources company that produces essential commodities including iron ore, copper, nickel, metallurgical coal and petroleum. The Filer’s principal executive office is located at 171 Collins Street, Melbourne, Victoria, 3000 Australia.
The Filer formerly operated under a Dual Listed Company Structure where two parent companies, the Filer and BHP Group Plc (Plc) , a company incorporated under the laws of England and Wales, operated as a single entity.
On January 31, 2022, the Filer completed a UK scheme of arrangement in order to unify the BHP corporate group structure under a single parent, being the Filer (the Unification Transaction). The Unification Transaction essentially resulted in each ordinary share in the capital of Plc (Plc Share) being exchanged for one Filer Share.
The Filer is not a reporting issuer in any province or territory of Canada and does not have a current intention of becoming a reporting issuer in any province or territory of Canada.
As at January 10, 2022, there were 2,950,251,394 Filer Shares and a further 2,112,071,796 Plc Shares issued and outstanding.
The Filer Shares are listed for trading on the Australian Securities Exchange (ASX), the London Stock Exchange (LSE) and the Johannesburg Stock Exchange (JSE) under the symbol “BHP”. In addition, American Depositary Shares (each representing two Filer Shares) evidenced by American Depositary Receipts (ADRs) trade on the New York Stock Exchange (NYSE) under the symbol “BHP”. Other than the foregoing listings, no securities of the Filer are listed or posted for trading on any exchange or market in Canada or outside of Canada. The Filer has no current intention of listing its securities on any Canadian exchange.
The Filer is registered with the Australian Securities and Investments Commission (the ASIC) and is subject to the requirements of the Corporations Act of 2001 (Cth), as amended (the Corporations Act). It is also subject to the rules and regulations of the ASX, LSE and JSE.
The Filer is a registrant with the United States Securities and Exchange Commission (SEC) and is subject to the requirements of the United States Securities Exchange Act of 1934, as amended, and the rules and regulations of the NYSE.
According to a registered shareholder report prepared for the Filer by Computershare Limited, as at December 31, 2021, there were 533 registered holders of Filer Shares and Plc Shares resident in Canada, representing approximately 0.09% of the registered holders of Filer Shares and Plc Shares worldwide, and holding an aggregate of approximately 935,047 Filer Shares and Plc Shares, representing approximately 0.02% of the total outstanding Filer Shares and Plc Shares as at such date. The Filer does not expect these numbers to have materially changed since that date.
According to a beneficial ownership report (the Beneficial Ownership Report) prepared for the Filer by Nasdaq Inc, as at December 15, 2021, there were 62 beneficial holders of Filer Shares and Plc Shares resident in Canada, representing approximately 0.06% of the beneficial holders of Filer Shares and Plc Shares identified in the Beneficial Ownership Report, and holding an aggregate of approximately 59,395,319 Filer Shares and Plc Shares, representing approximately 1.2% of the total outstanding Filer Shares and Plc Shares as at such date. The Beneficial Ownership Report accounts for approximately 80% of the total outstanding Filer Shares and Plc Shares as at such date and while indicative, is the most comprehensive source of information available to the Filer regarding the holdings and jurisdictions of residence of the beneficial holders of Filer Shares and Plc Shares. The Filer does not expect these numbers to have materially changed since the date of the Beneficial Ownership Report.
Based on the information above relating to holders of Filer Shares and Plc Shares, the number of registered and beneficial Filer Canadian Shareholders and the proportion of Filer Shares held by such shareholders is de minimis after giving effect to the Unification Transaction.
On November 22, 2021, the Filer announced that it signed a binding share sale agreement with Woodside for the merger of the Filer’s oil and gas portfolio with Woodside. Pursuant to the merger, Woodside will acquire all the issued and outstanding shares of BHP Petroleum International Pty Ltd. (BHP Petroleum) from the Filer in exchange for the issuance by Woodside to the Filer of Woodside Shares (Consideration Shares), which are expected to represent approximately 48% of the issued and outstanding Woodside Shares, on a post-issue basis (the Woodside Transaction). Immediately following receipt of the Consideration Shares, the Filer will complete the Dividend Distribution of the Consideration Shares to the Filer Shareholders as of the record date for such dividend on the basis of a fixed distribution ratio to be determined, subject to restrictions in any jurisdiction that prevent the distribution of the Consideration Shares pursuant to the Dividend Distribution in such jurisdiction.
Woodside is an Australian corporation and is a petroleum exploration and production company. Woodside’s principal executive office is located at 11 Mount Street, Perth, Western Australia, 6000 Australia.
Woodside is not a reporting issuer in any province or territory of Canada and does not have a current intention of becoming a reporting issuer in any province or territory of Canada.
As at January 10, 2022, there were 969,631,826 Woodside Shares issued and outstanding.
The Woodside Shares are listed for trading on the ASX under the symbol “WPL”. Other than the foregoing listing on the ASX, no securities of Woodside are listed or posted for trading on any exchange or market in Canada or outside of Canada. Woodside is currently pursuing a secondary listing on the NYSE through an ADR arrangement and admission to trading on the standard segment of the Main Market of the LSE, with a target of being active by completion of the Woodside Transaction. Woodside has no current intention of listing its securities on any Canadian exchange.
Woodside is registered with the ASIC and is subject to the requirements of the Corporations Act, and the rules and regulations of the ASX.
Woodside has informed the Filer that, according to a registered shareholder report prepared by Computershare Limited, as at January 7, 2022, there were 73 registered holders of Woodside Shares resident in Canada, representing approximately 0.03% of the registered holders of Woodside Shares worldwide, and holding an aggregate of approximately 131,953 Woodside Shares, representing approximately 0.01% of the total outstanding Woodside Shares as at such date.
Woodside has informed the Filer that Woodside engaged Orient Capital to run an indicative beneficial ownership analysis of shareholders where the beneficial ownership differs from the registered owners above a certain threshold (Beneficial Ownership Analysis). According to the Beneficial Ownership Analysis, as at November 30, 2021, there were 16 beneficial holders identified of Woodside Shares resident in Canada, representing approximately 2.3% of the beneficial holders of Woodside Shares worldwide that were identified in that report, and holding an aggregate of approximately 1,665.061 Woodside Shares, representing approximately 0.17% of the total outstanding Woodside Shares as at such date..
Based on the information above relating to Filer Canadian Shareholders and holders of Woodside Shares resident in Canada (Woodside Canadian Shareholders), the number of Woodside Canadian Shareholders and the proportion of Woodside Shares held by such shareholders is de minimis before, and is expected to remain de minimis after, giving effect to the Dividend Distribution.
The Woodside Transaction and the Dividend Distribution are inter-dependent and are expected to be completed in the second quarter of 2022.
Filer Shareholders will not be required to pay any cash, deliver any other consideration or surrender or exchange their Filer Shares, or take any other action in order to receive Consideration Shares in connection with the Dividend Distribution. The Dividend Distribution will occur automatically without any investment decision on the part of Filer Shareholders.
The Woodside Transaction and the Dividend Distribution are being effected in accordance with the laws of Australia.
The Filer is not required to obtain shareholder approval for the Woodside Transaction or the Dividend Distribution.
Filer Canadian Shareholders will be treated the same as Filer Shareholders resident in Australia in connection with the Woodside Transaction and Dividend Distribution. No changes to the Filer Shares will result from the Woodside Transaction and Dividend Distribution. Following such transactions, Filer Shareholders will continue to hold their Filer Shares, the Filer Shares will continue to be listed for trading on those stock exchanges on which they are listed immediately prior to the transactions, and Filer Shareholders, including Filer Canadian Shareholders, will continue to receive the continuous and periodic disclosure materials required to be sent by the Filer to its shareholders under applicable Australian law.
Pursuant to Australian law, the Filer will be producing an exchange announcement (the Exchange Announcement) on or about March 10, 2022 that describes the Woodside Transaction and the Dividend Distribution and their impact on the Filer and the Filer Shareholders, including information about the number of Consideration Shares expected to be distributed to Filer Shareholders and how the distribution ratio will be calculated, the expected tax consequences of the Dividend Distribution and other material information concerning the transactions. The Exchange Announcement will be publicly available.
Pursuant to the rules and regulations of the ASX, Woodside is required to obtain shareholder approval for the Woodside Transaction. In connection therewith, Woodside will be issuing a Notice of Meeting and Explanatory Memorandum to the holders of Woodside Shares to inform them of the Woodside Transaction (the Explanatory Memorandum) on or about March 10, 2022. The Explanatory Memorandum will be publicly available. In connection with the additional exchange listings which it is pursuing, Woodside will also be preparing and filing a registration statement with the SEC (United States) and a prospectus with the Financial Conduct Authority (United Kingdom), both of which will be publicly available.
Following the completion of the Dividend Distribution, Filer Canadian Shareholders who receive Consideration Shares pursuant to the Dividend Distribution, to the extent they continue to hold such shares, will be treated as any other Woodside shareholders and will thereafter be concurrently sent the same continuous and periodic disclosure materials required to be sent by Woodside under applicable Australian law to all other holders of Woodside Shares.
There will be no active trading market for the Woodside Shares in Canada following the Dividend Distribution and none is expected to develop. Consequently, it is expected that any resale of Woodside Shares distributed in the Dividend Distribution will occur through the facilities of the ASX or any other exchange or market outside of Canada on which the Woodside Shares may be quoted or listed at the time that the trade occurs or to a person or company outside of Canada.
The distribution by the Filer of the Consideration Shares to Filer Canadian Shareholders pursuant to the Dividend Distribution would be exempt from the prospectus requirement pursuant to section 2.31(2) of National Instrument 45-106 Prospectus Exemptions but for the fact that Woodside is not a reporting issuer under the securities legislation of any jurisdiction in Canada.
Neither the Filer nor, to the knowledge of the Filer, Woodside is in default of any of its obligations under the securities legislation of any jurisdiction in Canada.
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 Exemption Sought is granted provided that the first trade in the Consideration Shares acquired pursuant to the Dividend Distribution will be deemed to be a distribution that is subject to section 2.6 of National Instrument 45-102 Resale of Securities.
DATED at Toronto this 18th day of February, 2022.
“Cecilia Williams” Commissioner Ontario Securities Commission
“Frances Kordyback” Commissioner Ontario Securities Commission