Securities Law & Instruments

Headnote

Mutual Reliance Review System for Applications- German take-over bid made in Ontario - securities of offereeissuer held in bearer form, so that offeror unable to determinethe number of Ontario holders or percentage of securities heldby Ontario holders - number of Ontario holders and percentageof securities held believed to be de minimis - offermade in compliance with laws of Germany - bid exempted fromrequirements of Part XX, subject to certain conditions.

Applicable Ontario Statutes

Securities Act, R.S.O. 1990, c. S.5, as amended,ss. 93(1)(e), 95-100 and 104(2)(c).

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

ONTARIO, BRITISH COLUMBIA,ALBERTA,

SASKATCHEWAN, MANITOBA, ONTARIO,

QUEBEC, NOVA SCOTIA, AND NEWFOUNDLAND

AND LABRADOR

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

PROCTER & GAMBLE GERMANY

MANAGEMENT GmbH

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof the provinces of Ontario, British Columbia, Alberta, Saskatchewan,Manitoba, Quebec, Nova Scotia and Newfoundland and Labrador(the "Jurisdictions") has received an applicationfrom Procter & Gamble Germany Management GmbH (the "Applicant")for a decision under securities legislation of the Jurisdictions(the "Legislation") that the formal take-over bidrequirements in the Legislation, including the provisions relatingto delivery of an offer and take-over bid circular and any noticesof change or variation thereto, delivery of a directors' circularand any notices of change or variation thereto, minimum depositperiods and withdrawal rights, take-up of and payment for securitiestendered to a take-over bid, disclosure, financing, restrictionsupon purchases of securities, identical consideration and collateralbenefits (collectively, the "Take-over Bid Requirements")do not apply to the proposed take-over bid offer (the "Offer")by the Applicant for the remaining ordinary shares, and thepreference shares of Wella AG (the "Target");

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

AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101;

AND WHEREAS the Applicant has representedto the Decision Makers that:

1. The Applicant is a corporation incorporatedunder the laws of the Federal Republic of Germany. The Applicantis an indirect, wholly-owned subsidiary of The Procter &Gamble Company ("P&G"), a corporation incorporatedin the United States, with its shares listed for trading onthe New York Stock Exchange. P&G is a recognized leaderin the development, distribution and marketing of home andbeauty care products, marketing nearly 300 brands in morethan 160 countries.

2. The Applicant's registered office is locatedat D-65823 Schwalbach am Taunus, Germany and P&G's registeredoffice is located at Cincinnati, Ohio.

3. The Applicant is not a reporting issueror the equivalent in any of the Jurisdictions. The Applicant'ssecurities are not listed or quoted for trading on any Canadianor foreign stock exchange.

4. The Target is a corporation incorporatedunder the laws of the Federal Republic of Germany, with itsshares listed on the Deutsche Börse. The Target is aleading beauty care company selling its products in more than150 countries.

5. The Target's registered office is locatedat Darmstadt, Germany.

6. The Target's issued capital consists of44,135,676 ordinary shares and 23,381,670 preference shares.

7. The Target is not a reporting issuer orthe equivalent in any of the Jurisdictions. The Target's securitiesare not listed or quoted for trading on any Canadian stockexchange.

8. On March 17, 2003, the Applicant enteredinto share purchase agreement to purchase a controlling interestfrom the majority voting shareholders of the Target.

9. On March 18, 2003, the Applicant announcedits intention to launch a voluntary cash take-over bid forthe acquisition of the Target's remaining ordinary sharesfor a cash value of Euro 92.25 per share, and its remainingpreference shares for a cash value of Euro 61.50 per share.

10. The Offer is being made in accordancewith the laws of the Federal Republic of Germany, and in particular,in compliance with the German Securities Acquisition and TakeoverAct.

11. As permitted by German law, the Targethas issued bearer securities and does not maintain a shareregister. Accordingly, any information about the Target'sshareholdings in Canada can only be determined on a limitedenquiry basis by the Target. Based on such enquiry, the Targethas confirmed to the Applicant that they believe that theyhave two shareholders resident in Canada, one holding 79,585ordinary shares (approx. 0.2% of the 44,135,676 ordinary sharesoutstanding) and the other holding 12,800 preference shares(approx. 0.05% of the 23,318,670 preference shares outstanding).The Target is unable to determine in what Province these shareholdersreside. The Applicant has no reason to believe that holdersof 2% or more of the Target's shares are resident in Canada.

12. All material relating to the Offer thatis to be sent by the Applicant to holders of the Target'sshares in Germany will be sent to holders of such shares residingin the Jurisdictions including an English convenience translationand will be concurrently filed with the Decision Makers.

13. The de minimis exemption is notavailable to the Target since the bid is not being made incompliance with the laws of a jurisdiction that is recognizedby the Decision Makers for the purposes of the de minimisexemption. Also, because the Target does not maintain a shareregister, the Applicant is unable to determine conclusivelythe number of holders of the Target's shares resident in eachof the Jurisdictions, or the number of shares held by anysuch persons.

14. All of the holders of the Target's sharesto whom the Offer is made will be treated equally.

15. If the requested relief is not granted,holders of the Target's shares resident in the Jurisdictionswill not have the opportunity to participate in the Offer.

AND WHEREAS under the MRRS, this DecisionDocument evidences the decision of each of the Decision Makers(the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers underthe Legislation is that the Applicant is exempt from the Take-overBid Requirements in making the Offer to the shareholders ofthe Target who are resident in the Jurisdictions provided that:

(a) the Offer and all amendments to the Offerare made in compliance with the laws of Germany; and

(b) all material relating to the Offer thatis sent to the holders of the Target's shares in Germany willbe sent to the holders of the Target's shares resident inthe Jurisdictions, as well as an English convenience translation,and copies thereof filed concurrently with the Decision Makerin each Jurisdiction.

May 2, 2003.

"Paul M. Moore"
"Robert L. Shirriff"