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

BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN,

MANITOBA, ONTARIO, QUÉBEC,NOVA SCOTIA

AND NEWFOUNDLAND AND LABRADOR

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

P7S1 HOLDING L.P.

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,Québec, Nova Scotia and Newfoundland and Labrador (the"Jurisdictions") has received an application fromP7S1 Holding L.P. (the "Applicant") for a decisionunder the securities legislation of the Jurisdictions (the "Legislation")that the formal take-over bid requirements, including the provisionsrelating to delivery of an offer and take-over bid circularand any notices of change or variation thereto, delivery ofa directors' circular and any notices of change or variationthereto, minimum deposit periods and withdrawal rights, take-upof and payment for securities tendered to a take-over bid, disclosure,financing, restrictions upon purchases of securities, identicalconsideration and collateral benefits (collectively, the "Take-overBid Requirements"), do not apply to the proposed offer(the "Offer") by the Applicant for the outstandingpreferred shares ("Preferred Shares") of ProSiebenSat.1Media AG (the "Target");

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

AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Québec Commission Notice14-101;

AND WHEREAS the Applicant has representedto the Decision Makers that:

1. the Applicant is an exempted limited partnershipformed under the laws of the Cayman Islands and its registeredoffice is located at Walkers SPV Limited, Walker House, MaryStreet, P.O. Box 908 GT, George Town, Grand Cayman, CaymanIslands;

2. 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 Canadianstock exchange or market;

3. the Target is a stock corporation establishedunder the laws of Germany and is registered in the commercialregister of the local courts of Munich;

4. the Target's stated capital amounts toEUR 194,486,400 and is divided into 97,243,200 Common Shares,which are registered holders shares, and 97,243,200 PreferredShares, which are bearer shares; the Preferred Shares constitute"equity securities" for the purposes of the definitionof "take-over bid" in the Jurisdictions as theycarry a residual right to participate in the earnings of theTarget and, upon liquidation or winding-up of the Target,in its assets;

5. the Preferred Shares are traded at thestock exchanges in Frankfurt am Main, Dusseldorf, Stuttgart,Munich, Berlin-Bremen, Hannover and Hamburg; the Target alsomaintains a facility for American Depositary Receipts in respectof the Preferred Shares but those receipts are not listedon any exchange;

6. the Target is not a reporting issuer orequivalent in any of the Jurisdictions. The Target's securitiesare not listed or quoted for trading on any Canadian stockexchange or market;

7. the Applicant currently holds 69,999,000or approximately 72.0% of the outstanding Common Shares; theApplicant does not hold any of the Preferred Shares;

8. on August 11, 2003, the Applicant announcedthe acquisition of control over more than 30% of the votingrights of the Target and its intention to launch, pursuantto the requirements of German Law (§35 German SecuritiesAcquisition and Takeover Act), an all-cash mandatory tenderoffer whereby holders of Common Shares and Preferred Sharesof the Target would be invited to tender their Common Sharesand Preferred Shares of the Target; the announcement madeno statement as to the consideration as this is not requiredby German Law; in the case of a mandatory tender offer theGerman Securities Acquisition and Take-over Act providesfor minimum consideration that must be offered which is thehigher of the three-month weighted average stock exchangeprice during the three months before the announcement of theoffer and the price paid to other shareholders in previousor parallel transactions;

9. the Offer is being made, and the offerdocument (the "Offer Document") reflecting the termsof the Offer is being prepared, in accordance with the lawsof Germany and, in particular, in compliance with the GermanSecurities Acquisition and Takeover Act;

10. the Offer is also being made in the UnitedStates in compliance with Regulation 14E under the Securitiesand Exchange Act of 1934 and will be exempt from the requirementsof Regulation 14D under that act;

11. in accordance with German law, the OfferDocument will be available on the internet under http://www.P7S1Holding.comand www.saban.com as well as in the form of free printed copieswhich will be made available to holders of the Common Sharesand Preferred Shares, combined with a public announcementin a national German newspaper and the Wall Street Journal,U.S. edition, which will specify where and how the shareholdersmay obtain a copy of the Offer Document free of charge;

12. 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; the Target has informed the Applicant thatthe last enquiry commissioned by the Target concluded thatshareholders resident in various Canadian provinces hold morethan 2% of the outstanding Preferred Shares; the Applicantbelieves that as of September 5, 2003 there were no holdersof Common Shares resident in Canada; the Applicant believesthat one of the holders of Preferred Shares resides in BritishColumbia; the Applicant also believes that shareholders alsoreside in Manitoba, Ontario and Québec but given thatno share register exists for the Preferred Shares, these holderscannot be confirmed;

13. if any material relating to the Offeris sent by the Applicant to holders of the Preferred Sharesin Germany, such material will also be sent to holders ofPreferred Shares residing in the Jurisdictions (if addressesare known), along with an English translation for conveniencepurposes, and will be concurrently filed with the securitiesregulatory authorities in the Jurisdictions;

14. a public announcement in a national Canadiannewspaper, made at the same time as the public announcementin a national German newspaper, will specify where and howthe shareholders may obtain a copy of the material relatingto the Offer or an English convenience translation free ofcharge;

15. the de minimis take-over bid exemptionsfound in certain of the Jurisdictions are not available tothe Target since the bid is not being made in compliance withthe laws of a jurisdiction that is recognized by the applicableDecision Makers for the purposes of the de minimistake-over bid exemptions; also, because the Target does notmaintain a share register, the Applicant is unable to determineconclusively the number of holders of the Preferred Sharesresident in each of the Jurisdictions, or the number of PreferredShares held by any of these persons;

16. all of the holders of the Target's CommonShares and Preferred Shares to whom the Offer is made willbe treated equally;

17. if the requested relief is not granted,holders of the Preferred Shares resident in the Jurisdictionswill not have the opportunity to participate in the Offer;

AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(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:

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

(ii) any material relating to the Offer thatis sent to the holders of the Preferred Shares in Germanywill be sent to the holders of the Preferred Shares residentin the Jurisdictions as well as an English translation, andcopies of the material will be filed with the Decision Makerin each Jurisdiction; and

(iii) a public announcement in a nationalCanadian newspaper, made at the same time as the public announcementin a national German newspaper, will specify where and howthe shareholders may obtain a copy of any material relatingto the Offer or an English translation free of charge.

September 22, 2003.

"Brenda Leong"