Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications -- Issuer bid by Australian corporationthat is a reporting issuer in Canada - bid made in compliancewith applicable Australian laws -- 106 registered Ontario shareholdersholding less than 0.001% of the outstanding shares - corporationexempted from issuer bid requirements, subject to conditions.

Applicable Ontario Statutes

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 95, 96, 97, 98, and 104(2)(c).

Recognition Orders Cited

In the Matter of the Recognition of CertainJurisdictions Recognition Order (Clauses 93(1)(e) and 93(3((h)of Act) (1997), 20 OSCB 1035.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

ONTARIO, BRITISH COLUMBIA,ALBERTA,

SASKATCHEWAN, MANITOBA, 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

TELSTRA CORPORATION LIMITED

 

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 Telstra Corporation Limited ("Telstra") for adecision under the securities legislation of the Jurisdictions(the "Legislation") that the requirements containedin the Legislation relating to delivery of an offer and issuerbid circular and any notices of change or variation thereto,minimum deposit periods and withdrawal rights, take-up of andpayment for securities tendered to an issuer bid, disclosure,restrictions upon purchases of securities, identical considerationand collateral benefits (collectively, the "Issuer BidRequirements") do not apply to the proposed issuer bid(the "Issuer Bid") by Telstra;

AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission (the "OSC") is 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 Notice 14-101;

AND WHEREAS Telstra has represented tothe Decision Makers that:

1. Telstra is a corporation governed by thelaws of Australia.

2. Telstra is a major provider of telecommunicationsand Internet services in Australia, with a market capitalizationof approximately U.S. $40 billion.

3. Telstra is a reporting issuer, or the equivalent,in each of the provinces of Canada.

4. The common shares of Telstra (the "TelstraShares") are listed for trading on the Australian StockExchange, the New Zealand Stock Exchange and the New YorkStock Exchange (through American Depositary Receipts).

5. Telstra proposes to make an offer to purchasea number of the Telstra Shares from its shareholders.

6. The Issuer Bid will be conducted by wayof a "Dutch auction" in compliance with the lawsand requirements of the Australian Corporations Act2001.

7. The details of the Issuer Bid will be containedin an offer document (the "Circular") which willbe distributed to all holders of Telstra Shares (the "TelstraShareholders") and which will comply with all Australianlaw requirements.

8. As of August 25, 2003, there were 12,866,600,200Telstra Shares issued and outstanding. There are, accordingto Telstra's share register, 285 Telstra Shareholders residentin Canada (the "Canadian Shareholders"), holdingin the aggregate 378,091 Telstra Shares as follows:

Province of Residence

Number of Shareholders

Number of Telstra Shares

___________________

_____________________

______________________

 

Ontario

106

162,296

British Columbia

78

97,929

Alberta

52

58,317

Saskatchewan

1

1,000

Manitoba

5

8,000

Quebec

17

18,430

Nova Scotia

5

5,100

Newfoundland

6

5,830

9. The Issuer Bid will be made by way of aninvitation to all Telstra Shareholders as at a specified recorddate (currently anticipated to be October 17, 2003) to makean offer to sell a specified number of their Telstra Sharesto Telstra.

10. Telstra Shareholders will be invited totender up to 100% of their Telstra Shares. However, Telstradoes not intend to purchase more than approximately 260 millionTelstra Shares pursuant to the Issuer Bid, with Telstra'stotal spending on the Issuer Bid to fall between Austr.$800M(Cdn.$728M) and Austr.$1B (Cdn.$911.1M) (the "PurchaseLimit").

11. Telstra Shareholders will be requiredto specify in their offer the price at which they are willingto sell their Telstra Shares. This price must be within arange specified by Telstra in the Circular. This range willbe set shortly before the Issuer Bid tender period opens andwill be around the prevailing market price of Telstra Shares.Alternatively, Telstra Shareholders who do not wish to specifya price may make a "final price tender". TelstraShareholders who choose to make a final price tender offerwill be paid the final Issuer Bid price determined by Telstra,which may be any of the nominated prices within the rangespecified by Telstra.

12. The final Issuer Bid price (the "IssuerBid Price") will effectively be determined by TelstraShareholders through the tender process. The price will bethe lowest price at which Telstra can purchase its desirednumber of shares up to the Purchase Limit. Little or no scaleback of tenders is likely because Telstra will be able toselect the price at which it can purchase the amount of capitalthat is desired. However, the Issuer Bid terms will includea scale-back procedure to cover the situation where more tendersare received at and below the Issuer Bid Price than the numberof Telstra Shares targeted to be purchased. The scale backprocedure will be described in full in the Circular.

13. All successful Telstra Shareholders willbe paid the Issuer Bid Price even where they tendered a pricethat was below the Issuer Bid Price determined by Telstra.Telstra Shareholders who tender a price which is greater thanthe Issuer Bid Price will not have their Telstra Shares boughtback.

14. Telstra Shareholders will be able to withdrawtheir tender up until the tender closing date which will beat least 15 business days after the tender period commences.

15. All of the Telstra Shareholders to whomthe Issuer Bid is made will be treated equally.

16. The de minimis issuer bid exemptionsfound in certain of the Jurisdictions are not available inrespect of the Issuer Bid since the bid is not being madein compliance with the laws of a jurisdiction that is recognizedby the applicable Decision Makers for the purposes of thede minimis issuer bid exemptions. Also, the de minimisissuer bid exemptions found in certain of the Jurisdictionsare not available in respect of the Issuer Bid since the numberof Telstra Shareholders resident in such Jurisdictions isover 50.

17. The percentage of total outstanding TelstraShares held by Telstra Shareholders resident in each of Ontario,British Columbia and Alberta is well below the 2% de minimusthreshold (being approximately 0.001%, 0.0008% and 0.0005%respectively).

18. The Issuer Bid will be made by and inrespect of a company governed by and subject to the laws ofAustralia in compliance with applicable Australian laws, specificallythe requirements of the Australian Corporations Act2001, and the Circular and all other material relating tothe Issuer Bid that is sent by or on behalf of Telstra toTelstra Shareholders in Australia will be sent concurrentlyto the Canadian Shareholders and copies thereof will be filedconcurrently with the Decision Makers.

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 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 Telstra is exempt from the Issuer BidRequirements in respect of the Issuer Bid, provided that:

1. the Issuer Bid (and any amendments thereto)is made in compliance with applicable Australian laws; and

2. all materials relating to the Issuer Bidand any amendments thereto which are sent by or on behalfof Telstra to Telstra Shareholders in Australia are sent concurrentlyto Canadian Shareholders and copies thereof are filed concurrentlywith the Decision Makers.

October 20, 2003.

"Robert L. Shirriff"
"Robert W. Davis"