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Linamar Corporation and Linamar Hungary RT - s. 104(2)(c)
Headnote
Application under Section 104(2)(c) of the Securities Act (Ontario) -- exemption from sections 95-100 of Securities Act (Ontario) -- take-over bid in Ontario by offeror Canadian company for Hungarian target company that is not a reporting issuer in any Canadian jurisdiction -- offeror to acquire all outstanding stock of target that it does not already own -- target has four registered holders in Ontario, namely the offeror, an entity controlled by the offeror, and officers of the offeror -- offeror unaware of any beneficial holders of target shares in Ontario other than the registered holders -- Commission granted relief as take-over bid conducted in accordance with the laws of Hungary -- all material provided to Hungarian shareholders to be provided to Ontario shareholders -- all shareholders treated equally.
Statutes Cited
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 93(1)(e), 95-100, 104(2)(c).
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O 1990, CHAPTER S.5,
AS AMENDED (the "Act")
AND
IN THE MATTER OF
LINAMAR CORPORATION AND LINAMAR HUNGARY RT
ORDER
(section 104(2)(c) of the Act)
UPON the application (the Application) of Linamar Corporation (the Corporation) to the Ontario Securities Commission (the Commission) for an order pursuant to clause 104(2) of the Act exempting the Corporation from the requirements of section 95 to 100 of the Act (the Take-over Bid Requirements) in connection with the offer (the Offer) by the Corporation or a wholly-owned subsidiary of the Corporation to purchase all of the ordinary shares (the Linamar Hungary Shares) of Linamar Hungary RT (Linamar Hungary);
AND UPON considering the application and the recommendation of the staff of the Commission;
AND UPON the Corporation having represented to the Commission as follows:
1. The Corporation is a corporation incorporated under the laws of Ontario. Its registered office is located at 287 Speedvale Avenue West, Guelph, Ontario, NIH 1C5.
2. The Corporation is a reporting issuer in all of the provinces of Canada.
3. The Corporation's common shares are listed and posted for trading on the Toronto Stock Exchange under the symbol "LNR".
4. Linamar Hungary is a corporation incorporated under the laws of Hungary. Its registered office is located at Oroshúza, Csorvúsi át 27, in the Republic of Hungary.
5. The Linamar Hungary Shares are traded on the Budapest Stock Exchange.
6. Linamar Hungary is not a reporting issuer in any jurisdiction in Canada and its securities are not listed for trading on any published market in Canada.
7. As at December 5, 2006, there were 8,580,000 Linamar Hungary Shares outstanding. Linamar Hungary has no outstanding share options.
8. Based on the register of holders of Linamar Hungary Shares, there are four registered holders of Linamar Hungary Shares resident in Ontario. One of these holders is the Corporation, which is registered as holding 4,790,800 Linamar Hungary Shares, representing approximately 55.84% of the outstanding Linamar Hungary Shares. Another of these holders is 1600725 Ontario Inc., a wholly-owned subsidiary of the Corporation, which holds 240,000 Linamar Hungary Shares, representing approximately 2.80% of the outstanding Linamar Hungary Shares. The two other registered holders are the Chairman of the Corporation and the Chief Executive Officer of the Corporation (each being a member of the board of directors of each of the Corporation and Linamar Hungary) holding in the aggregate 462,000 Linamar Hungary Shares, representing approximately 5.38% of the outstanding Linamar Hungary Shares.
9. The Corporation is not aware of any beneficial holders of Linamar Hungary Shares resident in Canada other than those set out in the register of holders of Linamar Hungary Shares.
10. The Corporation has formally made the Offer in accordance with its obligations under the Act No. CCX. of 2001 on Capital Market (Hungary) ("the CMA"). The CMA was enacted to fulfil Hungary's obligation to implement Directive No. 2004/25 EC of the European Parliament and of the Council of 21 April 2004 on takeover bids.
11. Shareholders in Canada will be entitled to participate in the Offer on terms at least as favourable as the terms that apply to the general body of Shareholders.
12. To the extent that any holder of Linamar Hungary Shares is resident in Ontario, the Offer will constitute a "take-over bid" under the Act. The Act exempts a take-over bid from compliance with the Take-over Bid Requirements if the number of shareholders resident in Ontario is fewer than 50 and their aggregate shareholding is less than 2% of the outstanding shares of that class, provided that the bid is made in compliance with the laws of a jurisdiction that is recognized under the Act for such purposes.
13. The foregoing exemption is not available to the Corporation because the number of Linamar Hungary Shares registered in the name of residents in Ontario is greater than 2% of the outstanding shares of that class and also because Hungary is not a recognized jurisdiction under the Act for such purposes.
AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;
IT IS ORDERED pursuant to clause 104(2)(c) of the Act that the Corporation and any wholly-owned subsidiary is exempt from the Take-over Bid Requirements in connection with the Offer, provided that:
(a) the Offer and all amendments thereto are made in compliance with the laws of Hungary;
(b) all materials relating to the Offer that are sent by the Corporation generally to holders of Linamar Hungary Shares in Hungary will be sent to registered holders of Linamar Hungary Shares resident in Ontario, and copies thereof filed with Commission;
(c) the Corporation issues and files a press release in Canada announcing that it is making the Offer; and
(d) the Corporation posts conspicuously on its website all information relating to the Offer that is published in Hungary by the Corporation, Linamar Hungary or the Budapest Stock Exchange.
DATED this 27th day of February, 2007.
"Wendell S. Wigle"
"Suresh Thakrar"