BCE Inc.

Order

IN THE MATTER OF

THE SECURITIES ACT, R.S.O. 1990, c.S.5, AS AMENDED (the "Act")

AND

IN THE MATTER OF

BCE INC.

ORDER

 

UPON the application (the "Application") of BCE Inc. (the "Issuer") to the Ontario Securities Commission (the "Commission") for an order pursuant to clause 104(2)(c) of the Act exempting the Issuer from the requirements of sections 94 to 94.8 and 97 to 98.7 of the Act (the "Issuer Bid Requirements") in respect of the proposed purchases by the Issuer of up to 2,666,666 (collectively, the "Subject Shares") of its common shares (the "Common Shares") in one or more trades from The Toronto-Dominion Bank and/or its affiliates (collectively, the "Selling Shareholder");

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 1 Carrefour Alexander-Graham-Bell, Building A, 8th Floor, Verdun, Québec H3E 3B3.
  3. The Issuer is a reporting issuer in each of the provinces of Canada and the Common Shares of the Issuer are listed for trading on the Toronto Stock Exchange ("TSX") and the New York Stock Exchange under the symbol "BCE". 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 common share capital of the Issuer consists of an unlimited number of Common Shares, of which approximately 759,045,570 were issued and outstanding as of June 30, 2010.
  5. The corporate headquarters of the Selling Shareholder are located in the Province of Ontario.
  6. The Selling Shareholder has advised the Issuer that it does not directly or indirectly own more than 5% of the issued and outstanding Common Shares.
  7. The Selling Shareholder has advised the Issuer that it is the beneficial owner of at least 2,667,000 Common Shares.
  8. 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, or an "associate" or "affiliate" of the Issuer, as such terms are defined in the Act. The Selling Shareholder is an "accredited investor" within the meaning of National Instrument 45-106 Prospectus and Registration Exemptions.
  9. On December 29, 2009, the Issuer commenced a normal course issuer bid (its "Normal Course Issuer Bid") for up to 20,000,000 Common Shares (subject to a maximum aggregate purchase price of $500 million) through the facilities of the TSX in accordance with sections 628 to 629.3 of Part VI of the TSX Company Manual (the "TSX NCIB Rules"). As at June 30, 2010, 8,534,000 Common Shares have been purchased under the Issuer's Normal Course Issuer Bid, including 4,000,000 Common Shares which were purchased under off-market block purchases. Assuming the completion of the purchase of the Subject Shares, the Issuer will have purchased under its Normal Course Issuer Bid an aggregate of 6,666,666 Common Shares pursuant to off-market block purchases, representing one-third of the 20,000,000 Common Shares authorized to be purchased under such Normal Course Issuer Bid.
  10. The Issuer and the Selling Shareholder have entered into an agreement of purchase and sale (the "Agreement") pursuant to which the Issuer has agreed, subject to regulatory approval, to acquire the Subject Shares from the Selling Shareholder by one or more purchases each occurring prior to July 29, 2010 (each such purchase, a "Proposed Purchase") for a purchase price (the "Purchase Price") that will be determined pursuant to the Agreement. The Purchase Price will be at a discount to the prevailing market price and below the bid-ask price for the Issuer's Common Shares at the time of each Proposed Purchase.
  11. The Subject Shares acquired under each Proposed Purchase will constitute a "block" as that term is defined in section 628 of the TSX NCIB Rules.
  12. The purchase of the Subject Shares by the Issuer pursuant to the Agreement will constitute an "issuer bid" for purposes of the Act, to which the applicable Issuer Bid Requirements would apply.
  13. Because the Purchase Price will be at a discount to the prevailing market price and below the bid-ask price for the Issuer's Common Shares at the time of each Proposed Purchase, each Proposed Purchase 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 Shareholder in reliance upon the exemption from the Issuer Bid Requirements that is available pursuant to section 101.2(1) of the Act.
  14. But for the fact that the Purchase Price will be at a discount to the prevailing market price and below the bid-ask price for the Issuer's Common Shares at the time of each Proposed Purchase, the Issuer could otherwise acquire the Subject Shares as a "block purchase" (a "Block Purchase") in accordance with the block purchase exception in section 629(l)7 of the TSX NCIB Rules and the exemption from the Issuer Bid Requirements that is available pursuant to section 101.2(1) of the Act. The notice of intention to make a normal course issuer bid filed with the TSX by the Issuer contemplates that purchases under the bid may be made by such other means as may be permitted by the TSX, including by private agreements pursuant to an issuer bid exemption order issued by a securities regulatory authority.
  15. For each Proposed Purchase, the Issuer will be able to acquire the Subject Shares from the Selling Shareholder without the Issuer being subject to the dealer registration requirements of the Act.
  16. The Issuer is of the view that it will be able to purchase the Subject Shares at a lower price than the price at which it would be able to purchase the Shares under the Bid through the facilities of the TSX and the Issuer is of the view that this is an appropriate use of the Issuer's funds.
  17. 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 the control of the Issuer. The Proposed Purchases will be carried out with a minimum of cost to the Issuer.
  18. To the best of the Issuer's knowledge, as of June 30, 2010, the "public float" for the Common Shares represented more than 99% of all issued and outstanding Common Shares for purposes of the TSX NCIB Rules.
  19. 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.
  20. Other than the Purchase Price, no additional fee or other consideration will be paid in connection with the Proposed Purchases.
  21. At the time that the Agreement was entered into by the Issuer and the Selling Shareholder, neither the Issuer nor the Selling Shareholder were aware of any undisclosed "material change" or any undisclosed "material fact" in respect of the Issuer (each as defined in the Act).
  22. The Selling Shareholder owns 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 to do so would not be prejudicial to the public interest;

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

  1. the Proposed Purchases will be taken into account by the Issuer when calculating the maximum annual aggregate limit that is imposed upon the Issuer's Normal Course Issuer Bid in accordance with the TSX NCIB Rules;
  2. the Issuer will refrain from conducting a Block Purchase in accordance with the TSX NCIB Rules during the calendar week that it completes each Proposed Purchase and may not make any further purchases under its Normal Course Issuer Bid for the remainder of that calendar day;
  3. the Purchase Price is not higher than the last "independent trade" (as that term is used in paragraph 629(l)1 of the TSX NCIB Rules) of a board lot of Common Shares immediately prior to the execution of each Proposed Purchase;
  4. the Issuer will otherwise acquire any additional Common Shares pursuant to its Normal Course Issuer Bid and in accordance with the TSX NCIB Rules, including by means of open market transactions and by other means as may be permitted by the TSX, including private agreements under an issuer bid exemption issued by a securities regulatory authority;
  5. immediately following each Proposed Purchase of the Subject Shares from the Selling Shareholder, the Issuer will report the purchase of the Subject Shares to the TSX;
  6. at the time that the Agreement was entered into by the Issuer and the Selling Shareholder, neither the Issuer nor the Selling Shareholder were aware of any undisclosed "material change" or any undisclosed "material fact" in respect of the Issuer (each as defined in the Act);
  7. the Issuer will issue a press release in connection with the Proposed Purchases;
  8. the Issuer does not purchase, pursuant to off-market block purchases, more than one-third of the maximum number of Common Shares the Issuer can purchase under its Normal Course Issuer Bid.

DATED at Toronto this 20th day of July, 2010.

 

_______________________________
James Turner
Commissioner
Ontario Securities Commission
         _______________________________
Mary Condon
Commissioner
Ontario Securities Commission