Securities Law & Instruments


Mutual Reliance Review System for ExemptiveRelief Applications - application for relief from registrationand prospectus requirements in connection with certain tradesarising out of a plan of arrangement and demerger involvingissuer based in the United Kingdom - existing exemptions relatingto arrangements and reorganizations arguably may not be availablefor certain trades for technical reasons - filer has de minimisconnection to Canada - relief granted subject to resale restrictions.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am,ss. 25(1), 53(1), 74(1).

Applicable Ontario Rules

OSC Rule 45-501 - Exempt Distributions, s. 2.8.

Applicable Multilateral Instrument

Multilateral Instrument 45-102 - Resale of Securities,s. 2.14.













WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof Ontario, Manitoba and Nova Scotia (the "Jurisdictions")has received an application from Six Continents plc ("SixContinents"), TopCo plc ("TopCo") and NewCo plc("NewCo", and together with Six Continents and TopCo,the "Applicants") for a decision under the securitieslegislation of the Jurisdictions (the "Legislation")that the requirement contained in the Legislation to file andobtain a receipt for a preliminary prospectus and a prospectus(the "Prospectus Requirement") and the requirementto register to trade in a security (the "Registration Requirement")shall not apply to the issuance of the NewCo Shares (as definedbelow) or to the first trades to be made by holders of NewCoShares which shares were acquired pursuant to a reorganizationof Six Continents;

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this application;

AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Québec Commission Notice 14-101;

AND WHEREAS the Applicants have representedto the Decision Makers as follows:

Background Information

1. Six Continents is a company which was incorporatedand registered in England and Wales on 17 August 1967 as BassPublic Limited Company under the Companies Acts 1948to 1981. Six Continents changed its name from Bass PublicLimited Company to Six Continents plc on July 27, 2001.

2. Six Continents is a provider of hospitalityservices. Its hotel business (the "Hotel Business")includes brands such as InterContinental, Crowne Plaza andHoliday Inn and operates over 3,300 hotels in approximately100 countries. Its retail business (the "Retail Business")includes pubs, bars and restaurants of brands such as AllBar One, Browns and O'Neills. Six Continents operates approximately2000 sites, 1,100 of which are branded outlets. Six Continentsis also the majority shareholder of the Britvic soft drinksbusiness (the "Drinks Business").

3. As of November 29, 2002, the authorizedshare capital of Six Continents was £1,148,800,287 dividedinto 888,343,756 non-cumulative redeemable preference sharesof 95½ pence each and 1,072,971,427 ordinary shares(the "Six Continents Shares") of 28 pence each,of which no non-cumulative redeemable preference shares and866,614,035 ordinary shares have been issued and are creditedas fully paid. The remainder are unissued.

4. Six Continents is currently listed on theLondon Stock Exchange (the "LSE") under the symbol"SXC". The closing market price of Six ContinentsShares on November 28, 2002 was 590 pence and Six Continents'market capitalization on such date was approximately £5.1billion.

5. TopCo was incorporated and registered inEngland and Wales under the Companies Act, 1985 (the"Act") on October 2, 2002 as Hackplimco (No.111)Public Limited Company as a public company. NewCo was incorporatedand registered in England and Wales under the Act on October2, 2002 as Hackplimco (No.112) Public Limited Company as apublic company.

6. Six Continents, TopCo and NewCo are notand do not intend to become reporting issuers under the Legislation.

7. As of November 29, 2002, there were approximately172 Six Continents Shareholders resident in Canada. The SixContinents Shareholders resident in Canada hold approximately136,049 shares representing approximately 0.0001 % of theSix Continents Shares. Of the Six Continents Shareholdersresident in Canada, there are approximately 94 resident inOntario, 38 resident in British Columbia, 20 resident in Alberta,2 resident in Saskatchewan, 5 resident in Manitoba, 9 residentin Quebec, and 3 resident in Nova Scotia.

The Plan of Arrangement and Demerger

8. Six Continents is proposing to "demerge"its hotel, drinks and retail businesses by incorporating twonew companies, TopCo and NewCo, to be listed on the LSE. Oneof the new holding companies, TopCo, will acquire all of theissued and outstanding shares of Six Continents by way ofa plan of arrangement (the "Plan of Arrangement").After the Plan of Arrangement has been completed, the SixContinents hotel and drinks businesses (without the retailbusiness) will be transferred to the other newly-incorporatedholding company, NewCo, by a series of transactions (the "Demerger").

9. Pursuant to the Plan of Arrangement, SixContinents Shareholders' Six Continents Shares will be exchangedfor TopCo Shares on a one-for-one basis and a cash paymentfrom TopCo (which will be paid a few days after such exchange)for each Six Continents Share held as of the record date ofthe Plan of Arrangement.

10. An application will be made for a meetingto be convened by the High Court of Justice in England andWales (the "Court") to enable each Six ContinentsShareholder to consider and, if thought fit, approve the Planof Arrangement. The resolution must be approved by the majorityin number of the Six Continents Shareholders representingnot less than three-fourths of the nominal value of the SixContinents Shares held by such shareholders. In addition,an extraordinary general meeting of Six Continents will beconvened for the Six Continents Shareholders to approve thePlan of Arrangement and Demerger and other matters relatingto the Demerger.

11. A circular describing the Plan of Arrangementof TopCo (the "Six Continents Scheme Document")and forms of proxy will be sent to every Six Continents Shareholder,including those resident in Canada. The Six Continents SchemeDocument shall be prepared in accordance with the Act andthe Listing Rules of the UK Listing Authority (some of whichwill be provided by cross reference to the listing particularsprepared in respect of each of TopCo and NewCo) and will provide,among other things, the following:

(a) general descriptions of the businessof each of TopCo and NewCo following implementation of theDemerger;

(b) financial information on the hotel businessand retain business segments of Six Continents and pro formafinancials for TopCo and NewCo;

(c) the interests of the Six Continentsdirectors and the effect of the Plan of Arrangement on theirinterests; and

(d) the conditions for the implementationof both the Plan of Arrangement and Demerger.

12. The Plan of Arrangement is conditional,inter alia, upon the following:

(a) approval of a majority of Six ContinentsShareholders who represent not less than three-fourths ofthe nominal value of the Six Continents Shares voting ata meeting convened by the Court to approve the Plan of Arrangement;

(b) the passing of a special resolutionof Six Continents Shareholders at an extraordinary generalmeeting;

(c) the sanction by the Court of the Planof Arrangement, and the confirmation of the reduction incapital of Six Continents which comprises part of the Planof Arrangement; and

(d) the registration by the Registrar ofCompanies of an office copy of the order of the Court sanctioningthe Plan of Arrangement and reduction in capital.

13. The proposed court convened meeting andextraordinary general meeting of the Six Continents Shareholdersare currently scheduled for March 12, 2003 and, if all ofthe conditions are met, it is expected that the Plan of Arrangementwill be effective on April 11, 2003. On the effective date,the Six Continents Shares will be cancelled.

14. After the Plan of Arrangement has becomeeffective, there will be a share consolidation, the preciseterms of which are likely to be determined immediately priorto posting of the documents to shareholders. The number ofshares in TopCo held by former Six Continents Shareholderswill therefore be less than the number of Six Continents Sharesheld previously. In addition, there will be a reorganisationthe effect of which shall be that the Retail Business willno longer be owned by Six Continents but by TopCo.

15. Pursuant to the Demerger, TopCo will issueNewCo Shares to TopCo shareholders at the Demerger recordtime on a one-for-one basis. The Demerger will be effectedby a reduction of capital of TopCo. The reduction of capitalof TopCo will take place as follows:

(a) after the Plan of Arrangement has becomeeffective, the capital of TopCo will be reduced by reducingthe nominal value of each TopCo Share by an amount to bedetermined by the directors of TopCo at the time to be atleast the market value of all shares in Six Continents heldby TopCo, with Six Continents being the holding companyof the companies constituting the Hotel Business and DrinksBusiness at this stage;

(b) TopCo will transfer Six Continents toNewCo such that NewCo shall come to own all of the Hoteland Drinks Businesses; and

(c) the TopCo Shareholders on the date ofrecord of the Demerger will be allotted and issued one NewCoShare, credited as fully paid, for each TopCo Share.

16. The following procedural steps, interalia, must be taken in order for the Demerger to becomeeffective:

(a) the Plan of Arrangement becoming effective;

(b) the passing of a special resolutionof the Six Continents Shareholders at the extraordinarygeneral meeting;

(c) the board of directors of TopCo resolving,following the Plan of Arrangement becoming effective, thatthe Demerger is in the best interests of Six Continents;

(d) the transfer of the Retail Businessto TopCo having taken place;

(e) the High Court of Justice in Englandand Wales granting an order sanctioning the reduction ofcapital of TopCo; and

(f) the order referred to in (e) being registeredby the Registrar of Companies at Companies House in Cardiff,UK.

17. Admission of the NewCo Shares and theTopCo Shares to the Official List and to trading on the LSEmay also be a condition necessary to give effect to the Demerger.If all of the conditions of the Plan of Arrangement and Demergerare met, they will become effective. It is currently anticipatedthat listing of the TopCo Shares and NewCo Shares will becomeeffective, and that dealings will commence, on April 15, 2003.

18. Listing particulars of TopCo and NewCowill also be provided to each Six Continents Shareholder,including those resident in Canada. The listing particularswill be prepared in accordance with the listing rules of theUK Listing Authority pursuant to the Financial Servicesand Markets Act 2000. The listing particulars will containa description of the business of TopCo and NewCo. It willsummarise the Plan of Arrangement and the Demerger. The SixContinents Scheme Documents will contain a more fulsome descriptionof the Plan of Arrangement and the Demerger.

19. Generally, the purpose of the Six ContinentsScheme Document, and the listing particulars is to providesufficient information to all Six Continents Shareholdersentitled to vote at the meetings to allow them to make aninformed decision as to whether to vote in favour of or againstthe Plan of Arrangement and Demerger.

20. An application will be made for admissionto the Official List of the UK Listing Authority and admissionto trading on the LSE of the ordinary shares of each of TopCoand NewCo.

21. Every Six Continents Shareholder residentin Canada holding TopCo Shares and NewCo Shares after thecompletion of the Plan of Arrangement and Demerger will receiveall continuous disclosure documents required to be sent toholders resident in England and Wales in the case of TopCoShares and NewCo Shares pursuant to the laws, rules and regulationsof England and Wales, and applicable stock exchange rules.

22. There is a de minimis number ofSix Continents Shareholders in Canada and therefore therewill be, upon implementation of the Plan of Arrangement andDemerger, a de minimis number of TopCo and NewCo shareholdersin Canada.

23. An exemption from the Prospectus Requirementsand Registration Requirements of the Legislation is not availablefor the issuance of the NewCo Shares in the Jurisdictions.

24. An exemption from the Prospectus Requirementsof the Legislation is not available for the first trade inNewCo Shares in the Jurisdictions.

AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(collectively, the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the requirements contained in the Legislationthat provide the Decision Maker with the jurisdiction to makethe Decision has been met;

THE DECISION of the Decision Makers underthe Legislation is that:

1. the Registration Requirement and the ProspectusRequirement shall not apply to the issuance of NewCo Sharesin connection with the Plan of Arrangement and Demerger, providedthat the first trade in securities acquired under this Decisionin a Jurisdiction shall be deemed to be a distribution orprimary distribution to the public under the Legislation ofsuch Jurisdiction; and

2. the Prospectus Requirement shall not applyto the first trade in a security acquired under this Decisionif the conditions in subsection 2.14(1) of Multilateral Instrument45-102 Resale of Securities are satisfied.

February 12, 2003.

"R.W. Korthals"                    "R.L.Shirriff"