FirstService is proposing a butterfly spin-off of over half its assets

FirstService is proposing its separation into two public corporations (FirstService and Colliers) pursuant to a butterfly spin-off. The residential real estate and property services business of FirstService will be spun-off as New FSV (to be renamed FirstService), and (old) FirstService following its amalgamation with a subsidiary (FCRESI) will carry on the (retained) commercial real estate services division as Colliers.  Completion of the arrangement is conditional inter alia on a Canadian tax ruling and a U.S. tax opinion of PWC respecting treatment as a Code s. 355 spin-off.

The spun-off company (FirstService) apparently will have greater value than the distributing corporation (Colliers). A complication relates to there being minority shareholders of FCRESI. Arrangements for a purchase of their holdings in exchange for Colliers shares will be entered into before the Arrangement, but will be timed to occur immediately after the butterfly distribution so as not to run afoul of s. 55(3.1)(a). There is no intended compliance with the types-of-property rules in reliance on s. 55(3.02).

Neal Armstrong. Summary of FirstService Circular under Spin-Offs & Distributions – Butterfly spin-offs.