Plan of Arrangement
Under a Plan of Arrangement:
- Rights under rights plans of Target were cancelled and Target stock options, RSUs and DSUs were surrendered to Target for cash equal to their fair market value (net of withholding).
- All Target shares were transferred to Acquisico 1 (a wholly-owned Canadian subsidiary of non-resident Parent) for cash.
- Target elected to cease to be a public corporation.
- Target amalgamated with its wholly-owned resident subsidiary (Subco 2 - which in turn had interests in two subsidiary partnerships and corporate subsidiaries) to form Amalco 1.
- Acquisico 1 amalgamated with Amalco 1 to form Amalco 2 (the "Second Amalgamation").
Proposed transactions
- Amalco 2 will designate an amount within the limits described in s. 88(1)(d) in respect of capital property (other than ineligible property) owned by Target and/or Subco 2 at the effective time of the arrangement, including partnership interest and shares of subsidiaries in its return for its taxation year that commenced at the time of the Second Amalgamation.
- A Stock Purchase Agreement will close for the cash sale by Parent of Amalco 2 and certain US subsidiaries to an arm's length purchaser. The Stock Purchase Agreement and any subsequent transfer by one of the parties to that agreement will not result in any property that became property of Amalco 2 on the Second Amalgamation or "any property acquired by any person in substitution therefor" (within the meaning of that phrase for the purpose of clause 88(1)(c)(vi)(B)) to be acquired by any person described in subclauses 88(1)(c)(vi)(B)(I), (II) or (III) (on the assumption that the "subsidiary" referred to in those subclauses is Amalco 1 and the "parent" is Acquisico 1)."
Bump rulings
include: "[P]ursuant to subsection 88(4), Amalco 1 will be considered to be the same corporation as, and a continuation of, Target and Subco 2 for the purpose of:
- determining when Acquisico 1 last acquired control of Amalco 1; and
- determining whether the [listed partnership interest and subsidiary shares]… were capital property held by Amalco 1 when Acquisico 1 last acquired control of Target.