Thomson Reuters engaged in a U.S.$6.5B cash issuer bid under a modified Dutch auction
Prior to the s. 86 distribution of cash by Thomson Reuters described in a previous post, it made an issuer bid to purchase up to U.S.$9 billion of its shares for cash under a modified Dutch auction procedure. In fact, U.S.$6.5 billion in shares was tendered. Leaving aside s. 55(2), over ¾ of the purchase price was deemed to be a dividend.
The principal “modification” related to a desire of Woodridge, who held 62% of the Thomson Reuters shares, to not have its percentage interest change. Accordingly, there was added the concept of a “Proportionate Tender” under which a shareholder tendering its shares to Thomson Reuters under this alternative was deemed to have agreed to sell to Thomson Reuters, at the purchase price determined in accordance with the Dutch auction procedure, that number of shares that would result in its percentage shareholding remaining the same.
Shareholders also were offered a “Qualifying Holdco Alternative.” This entailed such a shareholder together with an affiliated “Preferred Holdco” transferring their Thomson Reuters shares to a Newco (potentially on a s. 85 rollover basis) in exchange for common and preferred shares of Newco. Newco (along with other Newcos) then amalgamating with a sub of Thomson Reuters under a triangular amalgamation in which the electing shareholder and Preferred Holdco received shares of Thomson Reuters. Such shares could then be tendered under the offer. Woodridge indicated that it would participate in the Qualifying Holdco Alternative, and it is unclear who else it might have been of interest to.
Neal Armstrong. Summary of Thomson Reuters Circular under Other – Issuer Bids – Share Offer.