Securities Law & Instruments

Headnote

Relief from issuer bid requirements --Reporting issuer received irrevocable offer to purchase 2 million of its common shares from its controlling shareholder at below market price. Controlling shareholder does not need the protections afforded by the issuer bid requirements. Market for the issuer's shares is extremely liquid, other shareholders able to sell their common shares on the TSX at a price higher than the price received by the controlling shareholder under the transaction. Other shareholders also able to sell their common shares to the issuer under its existing normal course issuer bid. Transaction is a related party transaction; issuer is complying with the requirements of OSC Rule 61-501. Relief granted under clause 104(2)(c) of the Securities Act (Ontario).

Statutes Cited

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

Rules Cited

OSC Rule 61-501 -- Insider Bids, Issuer Bids, Going Private Transactions and Related Party Transactions.

IN THE MATTER OF

THE SECURITIES ACT, R.S.O. 1990, c.S.5, AS AMENDED

AND

IN THE MATTER OF

GEORGE WESTON LIMITED

 

ORDER

(Clause 104(2)(c))

UPON the application (the "Application") of George Weston Limited ("GWL") to the Ontario Securities Commission (the "Commission") for an order pursuant to clause 104(2)(c) of the Act exempting GWL from the requirements of sections 95, 96, 97, 98 and 100 of the Act (the "Issuer Bid Requirements") in connection with the proposed acquisition by GWL of approximately 2 million of its common shares (the "Common Shares") from Wittington Investments Limited ("Wittington");

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON GWL having represented to the Commission that:

1. GWL is a corporation incorporated under the laws of Canada. It is a reporting issuer (or the equivalent) in all provinces of Canada. GWL is not in default of any requirement of securities legislation in the jurisdictions in which it is a reporting issuer.

2. As of September 30, 2003, there were approximately 132,117,834 Common Shares outstanding. The Common Shares are traded on the Toronto Stock Exchange ("TSX").

3. Wittington is a corporation incorporated under the laws of Canada. It is not a reporting issuer in any jurisdiction. Wittington owns directly or indirectly approximately 82,693,979 Common Shares, representing 62.5% of all the Common Shares outstanding.

4. GWL is in the process of unwinding certain currency swaps and interest rates swaps, which were established for hedging purposes in 2001. The gross proceeds from unwinding these swaps are expected to be approximately $338,000,000.

5. The board of directors of GWL (the "Board") has determined that the best use for the net proceeds of the unwinding of these swaps would be to buy back Common Shares.

6. After Wittington expressed an interest in selling some of its Common Shares to GWL, the Board established a committee of independent directors (the "Independent Committee") to consider whether, and on what terms, GWL should purchase Common Shares from Wittington.

7. Wittington has made an irrevocable offer (the "Offer") to GWL to sell, or cause a wholly-owned subsidiary to sell, approximately 2 million Common Shares to GWL at a price equal to 96% of the lesser of (a) the volume weighted average price on the TSX for the 20 business days prior to the receipt by Wittington of notice of acceptance by GWL of the Offer, and (b) the volume weighted average closing price for the Common Shares traded on the TSX for the three trading days (the "Previous 3 Day Price") immediately prior to the closing of the proposed acquisition of the Common Shares under the Offer (the "Transaction"). The Offer is open for acceptance until November 11, 2003 and has not as yet been accepted by GWL. The Offer is subject to the price under the Transaction not being less than $95.

8. If GWL accepts the Offer, GWL proposes to announce prior to the opening of the TSX on November 12th 2003 that it has unwound its swaps and intends to use some of the resulting proceeds to complete the Transaction. The Transaction will close on November 17, 2003, unless on such day 96% of the Previous 3 Day Price is less than $95, in which case the Transaction will close on the first trading day thereafter and on or before December 1, 2003 on which 96% of the Previous 3 Day Price is not less than $95.

9. The Independent Committee has, subject to obtaining any regulatory approvals, approved the Transaction on the terms set out in the Offer and has determined that the Transaction is in the best interests of GWL. In particular, the Independent Committee is of the view that GWL could purchase Common Shares pursuant to the Transaction at a price lower than the price at which GWL could purchase Common Shares under its existing normal course issuer bid. The Independent Committee is also of the view that all other shareholders of GWL would be able to sell their Common Shares on the TSX at a price that, after commissions, would be no less than the price Wittington would receive under the Transaction.

10. The Transaction does not adversely affect GWL or the rights of any of GWL's security holders and it does not materially affect control of GWL.

11. The market for the Common Shares is extremely liquid with the average active aggregate daily trades on the TSX for the period of June 18 to September 18, 2003 being in excess of 57,000 shares, with a value in excess of $6,000,000. The market for the Common Shares is a "liquid market" within the meaning of section 1.3 of Commission Rule 61-501.

12. At the time that the price for the Common Shares under the Transaction was negotiated, Wittington was not aware of any undisclosed material information in respect of GWL or the Common Shares that could reasonably be expected to affect the value of the Common Shares.

13. Wittington has advised GWL that it does not object to the granting of this order by the Commission.

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 GWL be exempt from the Issuer Bid Requirements in connection with the Transaction.

October 31, 2003.

"Paul M. Moore"
"Suresh Trakrar"