BCSC

Exemption Orders (Discretionary)

VANTECK (VRB) TECHNOLOGY CORP.

2001 BCSECCOM 913

Headnote:

Mutual Reliance Review System for Exemptive Relief Applications –relief given from the take over bid requirements because of the very unique circumstances of the offer and the de minimis connection to Canada, subject to conditions

Applicable British Columbia Provisions

Securities Act, R.S.B.C. 1996, c. 418, ss. 34(1)(a), 48, 61, 76, 105-108, 110 and 114(2)(c)

IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA AND ONTARIO

AND

IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF VANTECK (VRB) TECHNOLOGY CORP.

[para 1]
WHEREAS the local securities regulatory authority or regulator (the “Decision Maker”) in each of British Columbia, Alberta and Ontario (the “Jurisdictions”) has received an application from Vanteck (VRB) Technology Corp. (the “Filer”) for a decision under the securities legislation of the Jurisdictions (the “Legislation”) that the Filer be exempted from the requirements of the Legislation applicable to take over bids (the “Take Over Bid Requirements”) in respect of the extension to the Filer’s offer (the “Offer”) to acquire all of the outstanding shares of Pinnacle (VRB) Limited (“Pinnacle”);

[para 2]
AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief Applications (the “System”), the British Columbia Securities Commission is the principal regulator for this application;

[para 3]
AND WHEREAS the Filer has represented to the Decision Makers that:

1. the Filer is incorporated under the Canada Business Corporations Act and has its head office in British Columbia;

2. the Filer is a reporting issuer in each of the Jurisdictions and is not in default of any requirements of the Legislation;

3. the authorized capital of the Filer consists of an unlimited number of common shares (the “Vanteck Shares”), of which 29,159,435 Vanteck Shares are currently outstanding;

4. the Vanteck Shares are listed on the Canadian Venture Exchange (the “CDNX”);

5. Pinnacle is a company incorporated under the laws of Australia and is not a reporting issuer in any of the Jurisdictions;

6. the authorized capital of Pinnacle consists of 61,401,098 ordinary shares (the “Pinnacle Shares”), of which 55,901,885 Pinnacle Shares are currently outstanding plus options to acquire a further 5,449,213 Pinnacle Shares; 10,938,188, or 19.56%, of the outstanding Pinnacle Shares were held by the Filer prior to making the Offer;

7. the Pinnacle Shares are listed on the Australian Stock Exchange;

8. prior to the Offer, there were a total of 22 shareholders of Pinnacle resident in Canada holding an aggregate 3.77% of the outstanding Pinnacle Shares;

9. on July 30, 2001, the Filer made the Offer to acquire all of the outstanding Pinnacle Shares not already owned by it on the basis of one Vanteck Share for every four Pinnacle Shares;

10. the Offer was unconditional in Canada, except for the requirement that the Filer obtain CDNX approval prior to the closing of the Offer; the CDNX approved the Offer and the issuance of the Vanteck Shares to the Pinnacle shareholders on August 9, 2001;

11. the Offer constituted a “take over bid” as defined in the Legislation and was therefore subject to the Take Over Bid Requirements unless otherwise exempt from those requirements pursuant to (i) specific provisions of the Legislation or (ii) discretionary relief from statutory requirements granted by the Decision Maker in each Jurisdiction; the Legislation provides that a take over bid is exempt from the Take Over Bid Requirements where (the “De Minimis Exemption”):

(i) the number of holders in the Jurisdiction of securities of the class subject to the bid is fewer than 50;

(ii) the securities held by such holders constitute, in the aggregate, less than 2% of the outstanding securities of that class;

(iii) the bid is made in compliance with the laws of a jurisdiction recognized by the securities regulatory authority in the Jurisdiction; and

(iv) all material relating to the bid that is sent by the offeror to holders of securities of the class that is subject to the bid is concurrently sent to all holders in the Jurisdiction of such securities and filed with the securities regulatory authority in the Jurisdiction;

12. the Filer was not able to rely on the De Minimis Exemption in respect of the Offer in British Columbia because: (i) Australia is not a jurisdiction recognized by the securities regulatory authority in British Columbia and (ii) more than 2% of the outstanding Pinnacle Shares were held by residents of British Columbia;

13. the Offer was therefore made in Canada in accordance with the Take Over Bid Requirements in British Columbia, including the provision of rights of withdrawal to Pinnacle’s Canadian resident shareholders as required in the Legislation, and the filing in the Jurisdictions of a copy of the take over bid circular delivered to such shareholders;

14. the Offer was made in Australia in accordance with the laws of Australia, except that, following the making of the Offer, the Filer was advised that certain of the rights granted to the Canadian shareholders in accordance with the Take Over Bid Requirements that were not required to be given, and were not given, to the Australian shareholders of Pinnacle, violated the Australian legal requirement for equal treatment of all shareholders;

15. the original expiry of the Offer in Canada was September 7, 2001 and on September 10, 2001, the Filer will take up 1,760,000 Pinnacle Shares tendered by shareholders resident in Canada in accordance with the Take Over Bid Requirements, leaving 20 shareholders of Pinnacle resident in Canada holding 0.505% of the outstanding Pinnacle Shares;

16. on September 7, 2001, the Filer announced both that the Offer was extended to September 21, 2001 (the “Extension”) and that an application had been made to the Jurisdictions for an exemption from the Take Over Bid Requirements, including an exemption from the requirement to provide a right of withdrawal;

17. because of the advanced stage of the Offer and the differences in the laws, it is not feasible for the Filer to now comply with both the Australian laws and the Take Over Bid Requirements;

18. if the Filer were to launch a new bid for the outstanding Pinnacle Shares, it would be unable to rely on the De Minimis Exemption solely because Australia is not a jurisdiction recognized by the Decision Makers in the Jurisdictions; however, the Filer is not able to launch a new bid for the outstanding Pinnacle Shares under Australian law without leaving an appropriate period of time from the closing date of the Offer;

19. the Filer will provide a notice to the shareholders of Pinnacle resident in Canada advising of the Extension and of the affect of this Decision (as defined below) on the rights of the shareholders of Pinnacle resident in Canada outlined in the take over bid circular, and will file a copy of the notice with the Decision Makers in each of the Jurisdictions; and

20. during the Extension, all shareholders of Pinnacle resident in the Jurisdictions will be treated equally with other holders of Pinnacle Shares and in accordance with Australian laws;

[para 4]
AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each of the Decision Makers (collectively, the “Decision”);

[para 5]
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;

[para 6]
THE DECISION of the Decision Makers under the Legislation is that the Filer is exempt from the Take Over Bid Requirements in respect of the Offer during the Extension provided that:

(i) the Filer issues a press release announcing the Extension and the affect of this Decision;

(ii) the Filer delivers the notice set out in paragraph 19 to the shareholders of Pinnacle resident in the Jurisdictions and concurrently files a copy of the notice with the Decision Maker in each of the Jurisdictions; and

(iii) during the period of the Extension and thereafter, the Offer is made in compliance with applicable Australian laws.

[para 7]
DATED September 11, 2001

Derek E. Patterson
Acting Director