United States securities and exchange commission logo
May 13, 2022
Ian Laing
General Counsel
IMPERIAL OIL LTD
505 Quarry Park Boulevard SE
Calgary, Alberta
Canada T2C 5N1
Re: IMPERIAL OIL LTD
Schedule TO-I filed
May 6, 2022
SEC File No.
5-35902
Dear Mr. Laing:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments by providing the requested
information or advise us as
soon as possible when you will respond. If you do not believe our
comments apply to your facts
and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have
additional comments.
All defined terms used here have the same meaning as the offer to
purchase.
Schedule TO-I filed May 6, 2022
Documents Incorporated by Reference, page v
1. We note the following
disclosure: "All documents of the Company of the type referred to
above (excluding
confidential material change reports, if any) and business acquisition
reports that it files
with the securities regulatory authorities in Canada after the date of this
Offer and prior to the
termination of the Offer shall be deemed to be incorporated by
reference in this Offer
other than for U.S. federal securities law purposes." Please revise
to confirm that all
documents incorporated by reference into the Canadian offer materials
will be explicitly
incorporated into the U.S. offer documents as well. Alternatively,
explain why this would
not be the case.
Withdrawal Rights, page 16
2. Refer to the following
disclosure in the second sentence of this section: "Shares deposited
Ian Laing
FirstName
IMPERIALLastNameIan
OIL LTD Laing
Comapany
May NameIMPERIAL OIL LTD
13, 2022
May 13,
Page 2 2022 Page 2
FirstName LastName
pursuant to the Offer may be withdrawn by the Shareholder....(b) at
any time before the
expiration of ten (10) days from the date that a notice of change of
variation (unless (i) the
Company has taken up the Shares deposited pursuant to the Offer before
the date of the
notice of change or variation...) (emphasis added). Rule 13e-4(f)(2)
requires that
shareholders tendering into the offer be permitted to withdraw at any
time that the offer
remains open. It is unclear how tendered shares could be "taken up"
before the end of the
offer, or how a notice of change or variation could occur after take
up. Please revise here
and where similar language about withdrawal rights is included
elsewhere in the offer to
purchase.
3. Disclose that tendered shares may be withdrawn at any time after 40
business days after
commencement of the offer, if not yet accepted for payment. See Rule
13e-4(f)(2).
Certain Conditions of the Offer, page 17
4. We note the following statement in the second to last last paragraph
of this section on
page 19: "The failure by the Company at any time to exercise its
rights under any of
the foregoing conditions shall not be deemed a waiver of any such
right... and each such
right shall be deemed an ongoing right which may be asserted at any
time or from time to
time." This language suggests that if a condition is triggered
and the Company fails to
assert the condition, it will not lose the right to assert the
condition at a later time. Please
note that when a condition is triggered and the offeror wishes to
proceed with the offer
anyway, we believe that this decision constitutes a waiver of the
triggered condition(s).
Depending on the materiality of the waived condition and the number of
days remaining
in the offer, the offeror may be required to extend the offer and
circulate new disclosure to
security holders. Please confirm the Company's understanding in your
response letter. In
addition, note that when an offer condition is triggered by events
that occur during the
offer period and before expiration of the offer, the offeror should
inform holders how it
intends to proceed immediately, rather than waiting until the end of
the offer period,
unless the condition is one where satisfaction of the condition may be
determined only
upon expiration. Please confirm the Company's understanding in your
response letter.
5. All offer conditions must be satisfied or waived as of the expiration
of the offer, rather
than the date of payment for tendered shares. Please revise the
language in the first
paragraph of this section accordingly.
6. While an offer may be conditioned on any number of objective and
clearly-
described conditions, reserving the right to assert such conditions
and by implication
terminate the offer regardless of the circumstances" and for
reasons to include "any
action or inaction by the Company" potentially renders the offer
illusory. To avoid
violating Section 14(e) of the Exchange Act and the anti-fraud
provisions of Regulation
14E thereunder, please revise the first and second to last paragraphs
in this section,
consistent with this comment.
Ian Laing
FirstName
IMPERIALLastNameIan
OIL LTD Laing
Comapany
May NameIMPERIAL OIL LTD
13, 2022
May 13,
Page 3 2022 Page 3
FirstName LastName
7. Refer to condition (a) on pages 17-18 of the offer to purchase. This
condition permits the
Company to abandon the offer if the Company determines that an event
has occurred that
"may materially impair the contemplated benefits of the Offer to the
Company or
otherwise make it inadvisable to proceed with the Offer." This offer
condition as drafted
appears to allow the Company to terminate the offer whenever it
determines it is
"inadvisable" to proceed, which appears to render the offer illusory,
in contravention of
Section 14(e) of the Exchange Act and Regulation 14E thereunder.
Please revise.
8. Refer to condition (c) on page 18 of the offer to purchase. Revise to
clarify what you
mean by a "limitation on prices" for securities on any exchange or in
the over-the-counter
securities markets in Canada or the United States.
9. Refer to condition (c) on page 18. Clarify the scope of this condition
by quantifying what
would constitute a "significant change" in the market price of the
shares since the close of
business on May 2, 2022. We note the reference to a decrease of more
than 10% but we
also note the "without limitation" qualifier, which seems to indicate
that a price change of
greater or lesser significance could trigger this condition.
10. Refer to condition (f) on page 18. As noted above, all offer
conditions must be objective,
clearly described and outside the control of the bidder. Revise this
offer condition to more
clearly describe what would trigger it and when the
determination would be made. As
drafted, it appears that the Company could unilaterally decide not to
purchase shares
tendered within the specified modified Dutch auction range, if it
determined that the offer
price that the Company itself established did not represent the fair
value of such shares at
the time of the acquisition. We believe this could raise illusory
offer concerns under
Regulation 14E.
11. Refer to condition (i) on page 18. Quantify what would constitute a
"material tax
liability" for purposes of this offer. In your response letter, tell
us when this would be
determined, and why it would not be foreseeable before the offer
commenced, based on
the terms which are already known. We may have further comments, based
on your
response.
Extension and Variation of the Offer, page 19
12. Refer to the last paragraph on page 19. The disclosure in the first
sentence is confusing in
that the reference to "ten Business Days" in the second parenthetical
appears to be
duplicative. In addition, the qualifier "except as permitted by
applicable law" effectively
renders the time periods outlined earlier in the sentence unclear.
Please revise to more
clearly describe the circumstances under which the offer will be
extended upon a
"variation."
Taking Up and Payment for Deposited Shares, page 20
13. The disclosure here and elsewhere in the offer to purchase states that
tendered shares will
Ian Laing
FirstName
IMPERIALLastNameIan
OIL LTD Laing
Comapany
May NameIMPERIAL OIL LTD
13, 2022
May 13,
Page 4 2022 Page 4
FirstName LastName
be accepted for purchase "not later than ten days after the Expiration
Date" and payment
for accepted shares will occur "not later than three (3) Business Days
after they are taken
up." The definition of "Business Day" on page 2 of the offer materials
is inconsistent with
the definition in Rule 14d-1(g) (applicable to Regulation 14E as
well). Please explain how
paying for tendered shares more than 14 U.S. business days after the
Expiration Date of
this offer complies with your prompt payment obligations under Rule
14e-1(c) for an offer
that is not eligible to be made under on Schedule 13E-4F. As you know,
the Company
sought and received exemptive relief for other aspects of this offer
but did not request
prompt payment relief.
General
14. The fact that the low end of the range for this offer (C$62.00) is
below the most recent
trading price of the common shares pre-announcement of this offer
(C$64.12 on April 28,
2022), should be prominently disclosed in the offer materials. See
generally, Section II.B
in Commission Guidance on Mini-Tender Offers and Limited Partnership
Tender Offers,
SEC Release No. 34-43069 (July 24, 2000) ("If the price offered is
below the market price
when the offer commences, the disclosure should clearly explain this
prominently in the
document").
15. The price range in this modified Dutch auction is between C$62.00 -
$78.00 per share.
The C$16.00 difference between the low and high price in the range
represents a
difference of over 25% above the lowest end of the range. Please
advise us of the
authority upon which the Company relied to include a range of this
proportion in the offer.
In addition, please advise us, with a view toward revised disclosure,
how the Company
concluded that the use of such a price range complies with Section
14(e), Rule 13e-
4(d)(1)(ii) and Rule 14e-1(b).
16. On the cover page and in other places in the offer materials, you
state that tenders will not
be accepted from shareholders in certain jurisdictions. However, Rule
13e-4(f)(8)(i)
requires the offer to be open to all holders of the subject
securities. While you may
reserve the right not to disseminate the offer materials into
jurisdictions where doing so
would not be in compliance with the laws of such jurisdiction, revise
to remove the
implication that you may reject tenders.
Ian Laing
IMPERIAL OIL LTD
May 13, 2022
Page 5
We remind you that the filing persons are responsible for the accuracy
and adequacy of
their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
Please direct any questions to Christina Chalk, Senior Special
Counsel, at (202) 551-
3263.
FirstName LastNameIan Laing Sincerely,
Comapany NameIMPERIAL OIL LTD
Division of
Corporation Finance
May 13, 2022 Page 5 Office of Mergers
& Acquisitions
FirstName LastName