Securities Law & Instruments

Headnote

Clause 104(2)(c) -- Issuer bid -- relief from issuer bid requirements in sections 94 to 94.8 and 97 to 98.7 of the Act -- Issuer proposes to purchase, at a discounted purchase price, approximately 4,700,000 of its common shares from two shareholders -- due to discounted purchase price, proposed purchases cannot be made through TSX trading system -- but for the fact that the proposed purchases cannot be made through the TSX trading system, the Issuer could otherwise acquire the subject shares in reliance upon the issuer bid exemption available under section 101.2 of the Act and in accordance with the TSX rules governing normal course issuer bid purchases -- no adverse economic impact on or prejudice to issuer or public shareholders -- proposed purchases exempt from issuer bid requirements in sections 94 to 94.8 and 97 to 98.7 of the Act, subject to conditions.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 94 to 94.8, 97 to 98.7, 104(2)(c).

December 12, 2008

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, c. S.5, AS AMENDED

AND

IN THE MATTER OF

POTASH CORPORATION OF

SASKATCHEWAN INC.

 

ORDER

(Section 104(2)(c))

UPON the application (the Application) of Potash Corporation of Saskatchewan Inc. (the Issuer) to the Ontario Securities Commission (the Commission) for an order pursuant to Section 104(2)(c) of the Securities Act (Ontario) (the "Act") exempting the Issuer from the formal issuer bid requirements of Sections 94 to 94.8 and 97 to 98.7 of the Act (the Formal Issuer Bid Requirements) in connection with the proposed purchases by the Issuer of approximately (and in no event greater than) 4,700,000 of its common shares (the Subject Shares) of its common shares (the Common Shares) from The Toronto-Dominion Bank and/or Bank of Montreal, and or such shareholder's affiliates (collectively, the Selling Shareholders);

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Issuer having represented to the Commission that:

1. The Issuer is a corporation governed by the Canada Business Corporations Act.

2. The head office and registered office of the Issuer are located at Suite 500, 122 -- 1st Avenue South, Saskatoon, Saskatchewan S7K 7G3

3. The Issuer is a reporting issuer in each of the provinces and territories of Canada and the Common Shares are listed for trading on the Toronto Stock Exchange (the TSX) and the New York Stock Exchange. The Issuer is not in default of any requirement of the securities legislation in the jurisdictions in which it is a reporting issuer.

4. The authorized share capital of the Issuer consists of an unlimited number of Common Shares, of which approximately 298,638,887 Common Shares are issued and outstanding as of December 1, 2008 and an unlimited number of first preferred shares, of which no first preferred shares have been issued.

5. Pursuant to a amended Notice of Intention to make a Normal Course Issuer Bid dated and filed with the TSX on September 15, 2008 (the Notice), the Issuer is permitted to make normal course issuer bid (the Bid) purchases for the period starting January 31, 2008 and ending on January 30, 2009 and for a maximum of 31,500,000 Common Shares. As at December 1, 2008, 19,399,200 Common Shares have been purchased under the Bid.

6. The Notice of Intention, as amended, filed with the TSX contemplates that purchases made under the Bid may be made by way of exempt offer or as otherwise permitted by the TSX.

7. The Issuer and the Selling Shareholders intend to enter into one or more agreements of purchase and sale (each, an Agreement), pursuant to which the Issuer will agree to acquire the Subject Shares from the Selling Shareholders by one or more purchases occurring prior to January 30, 2009 (each such purchase, a Proposed Purchase), for a purchase price (the Purchase Price) that will be negotiated at arm's length between the Issuer and the Selling Shareholder. The Purchase Price will be at a discount to the prevailing market price and below the prevailing bid-ask price for the Common Shares at the time of each Proposed Purchase.

8. The purchase of Subject Shares by the Issuer pursuant to each Agreement will constitute an "issuer bid" for purposes of the Act, to which the Formal Issuer Bid Requirements would otherwise apply.

9. Because the Purchase Price will be at a discount to the prevailing market price and below the prevailing bid-ask price for the Common Shares at the time of each Proposed Purchase, each trade cannot be made through the TSX trading system and, therefore, will not occur "through the facilities" of the TSX. As a result, the Issuer will be unable to acquire the Subject Shares from the Selling Shareholders in reliance upon the exemption from the Formal Issuer Bid Requirements that is available pursuant to Section 101.2(1) of the Act.

10. But for the fact that the Purchase Price will be at a discount to the prevailing market price and below the prevailing bid-ask price for the Common Shares at the time of each trade, the Issuer could otherwise acquire the Subject Shares as a "block purchase" (a Block Purchase) in accordance with Section 629(l)7 of Part VI of the TSX Company Manual (the TSX Rules) and Section 101.2(1) of the Act.

11. Each of the Selling Shareholder is at arm's length to the Issuer and is not an "insider" of the Issuer or "associate" of an "insider" of the Issuer, an "associate" or "affiliate" of the Issuer, as such terms are defined in the Act. In addition, each Selling Shareholder is an "accredited investor" within the meaning of National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106).

12. For each Proposed Purchase, the Issuer will be able to acquire the Subject Shares from the Selling Shareholders in reliance upon the exemption from the dealer registration requirements of the Act that is available as a result of the combined effect of Section 2.16 of NI 45-106 and Section 4.1(a) of Commission Rule 45-501 Ontario Prospectus and Registration Exemptions.

13. The Issuer is of the view that the purchase of the Subject Shares at a lower price than the price at which the Issuer would be able to purchase the Common Shares under the Bid is an appropriate use of the Issuer's funds.

14. The purchase of the Subject Shares will not adversely affect the Issuer or the rights of any of the Issuer's securityholders and it will not materially affect control of the Issuer. The Proposed Purchases will be carried out with a minimum of cost to the Issuer.

15. The market for the Common Shares is a "liquid market" within the meaning of Section 1.2 of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions. The purchase of the Subject Shares would not have any effect on the ability of other shareholder of the Issuer to sell their Common Shares in the market.

16. Other than the Purchase Price, no additional fee or other consideration will be paid in connection with the Proposed Purchases.

17. At the time that each Agreement is entered into by the Issuer and the Selling Shareholder, neither the Issuer nor the Selling Shareholder will be aware of any undisclosed "material change" or any undisclosed "material fact" (each as defined in the Act) in respect of the Issuer.

18. As at the date hereof, to the knowledge of the Issuer after reasonable inquiry, the Selling Shareholders own the Subject Shares and the Subject Shares were not acquired in anticipation of resale pursuant to the Proposed Purchases.

AND UPON the Commission being satisfied that it would not be prejudicial to the public interest for the Commission to grant the requested exemption;

IT IS ORDERED pursuant to Section 104(2)(c) of the Act that the Issuer be exempt from the Formal Issuer Bid Requirements in connection with each Proposed Purchase, provided that:

(a) the Proposed Purchases will be taken into account by the Issuer when calculating the maximum annual aggregate limit for the Bid Purchases in accordance with the TSX Rules;

(b) the Issuer will refrain from conducting a Block Purchase in accordance with the TSX Rules during the calendar week it completes each Proposed Purchase and may not make any further purchases under the Bid for the remainder of that calendar day;

(c) the Purchase Price is not higher than the last "independent trade" (as that term is used in paragraph 629(l)1 of the TSX Rules) of a board lot of Common Shares immediately prior to the execution of each Proposed Purchase;

(d) the Issuer will otherwise acquire any additional Common Shares pursuant to the Bid and in accordance with the TSX Rules;

(e) immediately following each its purchase of Subject Shares from the Selling Shareholder, the Issuer will report the purchase of such Subject Shares to the TSX;

(f) at the time that each Agreement is entered into by the Issuer and the Selling Shareholder, neither the Issuer nor the Selling Shareholder will be aware of any undisclosed "material change" or any undisclosed "material fact" (each as defined in the Act) in respect of the Issuer; and

(g) the Issuer will issue a press release in connection with the Proposed Purchases.

"Wendell S. Wigle"
Commissioner
Ontario Securities Commission
 
"Carol S. Perry"
Commissioner
Ontario Securities Commission