CRAVATH, SWAINE & MOORE LLP
WORLDWIDE PLAZA
825 EIGHTH AVENUE
NEW YORK, NY 10019
Telephone: (212) 474-1000
Facsimile: (212) 474-3700
Writer's Direct Dial Number:
(212) 474-1122
CONFIDENTIAL TREATMENT
REQUESTED UNDER FOIA RULE 83
October 7, 2004
MICROCELL TELECOMMUNICATIONS INC.
SCHEDULE TO-C FILED SEPTEMBER 20, 2004 BY ROGERS WIRELESS
COMMUNICATIONS INC.
SCHEDULE TO-C FILED SEPTEMBER 21, 2004 BY ROGERS
WIRELESS COMMUNICATIONS INC.
SCHEDULE TO-T FILED SEPTEMBER 30, 2004 BY ROGERS WIRELESS INC.
AND ROGERS WIRELESS COMMUNICATIONS INC.
FILE NO. 5-58635
Dear Ms. Chalk:
On behalf of Rogers Wireless Communications Inc., a Canadian corporation
("RWCI"), and Rogers Wireless Inc. ("RWI"), a Canadian corporation and a
wholly owned subsidiary of RWCI, this letter responds to your letter dated
October 5, 2004 (the "Comment Letter"), providing comments on RWCI's and RWI's
Schedule TO filed on September 30, 2004 (as amended, the "Schedule TO"). For
your convenience, each comment from the Comment Letter has been reproduced
below, followed by RWCI's and RWI's response to such comment. Capitalized
terms defined in the Schedule TO and used in the following responses without
definition have the meanings specified in the Schedule TO.
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SCHEDULE TO-CS FILED SEPTEMBER 20 AND 21, 2004
1. ALL BIDDERS IN THE OFFERS MUST FILE A SCHEDULE TO-C TO REFLECT
PRELIMINARY COMMUNICATIONS ABOUT THE OFFERS. WE NOTE THAT ROGERS WIRELESS
INC. WAS NOT LISTED AS A FILING PERSON ON THIS SCHEDULE TO-C OR THE ONE
FILED THE DAY BEFORE. PLEASE INDICATE WHY.
On September 19, 2004, RWCI entered into a Support Agreement with Microcell
Telecommunications Inc. ("Microcell") dated as of September 19, 2004 (the
"Support Agreement"), pursuant to which RWCI agreed to commence a tender offer
for all of Microcell's outstanding Class A restricted voting shares, Class B
non-voting shares, Warrants 2005 and Warrants 2008. On September 27, 2004,
RWCI assigned its rights under the Support Agreement to RWI, its wholly owned
subsidiary. At the time the preliminary communications regarding the offers
were filed (September 20, 2004 and September 21, 2004), RWCI had not yet
assigned its rights under the Support Agreement to RWI, nor had it made any
decision to do so. As such, only RWCI was identified as a filer of the
pre-commencement communications.
OFFERS TO PURCHASE AND CIRCULAR - EXHIBIT (A)(1)(I)
GENERAL
2. PLEASE EXPLAIN SUPPLEMENTALLY WHY YOU HAVE NOT INCLUDED AS A BIDDER IN
THIS OFFER ROGERS COMMUNICATIONS (RCI), WHICH AS YOU KNOW CONTROLS BIDDER
RWCI, WHICH IN TURN IS THE PARENT OF BIDDER ROGERS WIRELESS INC. PROVIDE
THE SAME ANALYSIS AS TO AT&T WIRELESS SERVICES AND JVII GENERAL
PARTNERSHIP, WHICH AT THE TIME THESE OFFERS COMMENCED, TOGETHER OWNED
34.2% OF RWCI. WE MAY HAVE ADDITIONAL COMMENTS AFTER REVIEWING YOUR
RESPONSE. BE AWARE THAT IF YOU ADD ADDITIONAL BIDDERS AS A RESULT OF THIS
COMMENT, YOU MAY BE REQUIRED TO DISSEMINATE A REVISED DISCLOSURE DOCUMENT
AND EXTEND THE OFFER PERIOD, DEPENDING ON THE MATERIALITY OF THE NEW
INFORMATION PROVIDED FOR THOSE ENTITIES.
The Offeror in the Offers is RWI, a reporting company under Section 15(d) of
the Exchange Act of 1934 with assets of over Cdn.$3 billion and revenues for
the year ended December 31, 2003 of over Cdn.$2 billion. RWCI, the sole
shareholder of RWI, is also a reporting company and its Class B restricted
voting shares are publicly listed in both Canada and the United States.
Although RWCI is controlled by Rogers Communications Inc., a corporation
governed by the Business Corporations Act (British Columbia) ("RCI"), RWCI's
board of directors has a fiduciary duty to act in the best interests of all of
its shareholders (including its non-RCI shareholders) and the RWCI board of
directors includes three directors who are elected by the non-RCI shareholders
(these directors are in addition to the RWCI directors appointed by AT&T
Wireless, described below). The determination of the RWCI and RWI boards of
directors to proceed with the Offers was based on the recommendations of the
management of RWCI and RWI.
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RWI has the financial resources and ability to consummate the Offers
independently of RCI. As disclosed, the Bridge Loan from RCI is only a
short-term financing vehicle. The Bridge Loan has market terms and RWI intends
to seek third-party financing for the Offers soon after their consummation.
RWI has a long history of successfully accessing capital markets for
financing.
Although RCI was involved in certain of the initial contacts with
Microcell (as a party to the Confidentiality Agreement and access to the
Microcell virtual dataroom), the negotiations with Microcell regarding the
transaction were conducted by RWCI. Although RCI did make two joint
announcements with RWI in early September regarding its consideration of a
possible transaction with Microcell, these disclosures by RCI were made in the
context of an active registration statement for its equity securities and were
intended to inform the market of a potential material transaction affecting
one of its major assets. The approval by the RCI board of directors of the
terms of the Offers and the Support Agreement was part of the RCI board's
review and approval of the Bridge Loan and was not otherwise a requirement for
RWCI's proceeding with the transaction. RWCI and RWI respectfully submit that
RCI is not a bidder in the Offers.
However, as RCI is the ultimate controlling person of RWI, RWCI and RWI
have included the disclosures required under Items 3, 5, 6, 7 and 8 of
Schedule TO in accordance with Instruction C thereto in respect of RCI in
Schedule A and Sections 3, 4, 8 and 9 of the Circular. RCI has recently
confirmed how it intends to finance the Bridge Loan to RWI. Accordingly, RWCI
and RWI have revised Section 8 of the Circular to clarify that RCI will fund
the loan to RWI using (i) cash on hand, (ii) cash to be received in the form
of a return of capital from Rogers Cable Inc., a corporation governed by the
Business Corporations Act (Ontario) and a wholly owned subsidiary of RCI and
(iii) cash to be received in the form of a partial repayment of an
intercompany advance made to Rogers Media Inc., a corporation governed by the
Business Corporations Act (British Columbia) and a wholly owned subsidiary of
RCI. Each of Rogers Cable Inc. and Rogers Media Inc. will make draw downs
under their committed bank credit facilities to fund the cash transfers to
RCI. The revision to Section~ 8 is as follows:
The following sentence is hereby added to the end of the first paragraph
of Section 8 of the Circular "Source of Funds" on page 43 of the Offers
to Purchase and Circular:
"RCI intends to fund the Bridge Loan of up to $900 million using (i) cash
on hand, (ii) cash to be received in the form of a return of capital from
Rogers Cable Inc., a corporation governed by the Business Corporations
Act (Ontario) and a wholly owned subsidiary of RCI and (iii) cash to be
received in the form of a partial repayment of an intercompany advance
made to Rogers Media Inc., a corporation governed by the Business
Corporations Act (British Columbia) and a wholly owned subsidiary of RCI.
Each of Rogers Cable Inc. and Rogers Media Inc. will make draw downs
under their committed bank credit facilities to fund the cash transfers
to RCI."
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Although AT&T Wireless Services Inc. ("AT&T Wireless"), through JVII
General Partnership ("JVII"), owns approximately 34.2% of RWCI (which is the
sole shareholder of RWI), AT&T Wireless is not an ultimate controlling person
of RWI. AT&T Wireless does not exercise "control" over RWCI, as RCI, which
holds an approximate 70% voting interest in RWCI and has the ability to elect
a majority of the directors to the RWCI board of directors, in fact controls
RWCI.
RWCI and RWI also do not believe that either JVII or AT&T Wireless,
through their representation on the board of directors of RWCI, has the power
to influence the management or policies of RWCI. AT&T Wireless's position with
respect to RWCI is that of a strategic investor which has an interest in
nominating directors for the purpose of understanding and monitoring the
policies, performance and strategic direction of its investment. The RWCI
board members nominated by AT&T Wireless through JVII do not exert any
influence over the day-to-day management or long-term strategy of RWCI. AT&T
Wireless's board representation simply provides it with access to information
regarding RWCI in order to understand the operations and strategy of RWCI, but
has in no way provided AT&T Wireless with any meaningful influence over the
management or policies of RWCI.
Moreover, as disclosed in Section 1 of the Circular, RCI has entered into
an agreement to purchase AT&T Wireless's entire interest in RWCI (the
"Purchase Agreement"), which transaction is scheduled to close on October 13,
2004, well in advance of the expiration date of the Offers. In fact, under the
Purchase Agreement, JVII agreed that neither RCI nor RWCI is required to
obtain the prior written approval of JVII in respect of any offer for, or
purchase of, shares or assets of Microcell. The AT&T Wireless-nominated
directors of RWCI and RWI also abstained from all decisions regarding the
Offers in light of the pending sale under the Purchase Agreement. We
respectfully submit that neither AT&T Wireless nor JVII is an ultimate
controlling person of RWI, and as such, no disclosure regarding these entities
is required under Instruction C of Schedule TO.
3. WE NOTE FROM AN AMENDED SCHEDULE 14D-9 FILED BY THE COMPANY ON AUGUST 10,
2004 IN CONNECTION WITH THE COMPETING TENDER OFFER BY TELUS CORPORATION,
MICROCELL DISCLOSED THAT IT HAD SHARED CERTAIN NON-PUBLIC INFORMATION,
INCLUDING FINANCIAL FORECASTS AND PROJECTIONS, WITH CERTAIN POTENTIAL
ACQUIRORS. INDICATE SUPPLEMENTALLY WHETHER YOU RECEIVED SUCH INFORMATION
FROM THE COMPANY PURSUANT TO THE CONFIDENTIALITY AGREEMENT BETWEEN
OFFEROR AND MICROCELL. IF SO, SUPPLEMENTALLY EXPLAIN THE LEGAL BASIS FOR
YOUR OMISSION OF SUCH INFORMATION OR ANY REFERENCE TO THEM IN THESE
DISCLOSURE DOCUMENTS. WE MAY HAVE FURTHER COMMENTS.
On page 31 of the Offers to Purchase and Circular, RWI discloses that
representatives of RWI and RWCI were given access to Microcell's virtual data
room and met with Microcell management after RCI and RWCI entered into a
confidentiality and standstill agreement with Microcell on July 14, 2004. The
information in the Microcell data room and provided by Microcell management
included the financial projections disclosed in the Microcell Schedule 14D-9/A
to which you refer, as well as Microcell's report of foreign issuer on Form
6-K filed with the Commission on August 10, 2004. As such information was made
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available to the general public and thus was no longer subject to the
Confidentiality Agreement more than five weeks in advance of RWCI's and RWI's
entering into the Support Agreement on September 19, 2004 and commencing the
Offers on September 30, 2004, RWCI and RWI do not believe such information is
non-public information.
SECTION 4. CONDITIONS OF THE OFFERS, PAGE 18
4. WE BELIEVE THAT A TENDER OFFER MAY BE CONDITIONED ON A VARIETY OF EVENTS
AND CIRCUMSTANCES, PROVIDED THAT THEY ARE NOT WITHIN THE DIRECT OR
INDIRECT CONTROL OF THE OFFEROR, AND ARE DRAFTED WITH SUFFICIENT
SPECIFICITY TO ALLOW FOR OBJECTIVE VERIFICATION THAT THE CONDITIONS HAVE
BEEN SATISFIED. IN THE LAST PARAGRAPH ON PAGE 19, YOU STATE THAT YOU MAY
ASSERT AN OFFER CONDITION "REGARDLESS OF THE CIRCUMSTANCES GIVING RISE TO
SUCH ASSERTION, INCLUDING ANY ACTION OR INACTION BY THE OFFEROR."
HOWEVER, AS INDICATED ABOVE, RESERVING THE RIGHT TO TERMINATE THE OFFER
UNDER CIRCUMSTANCES BY WHICH YOU COULD PURPOSELY "TRIGGER" AN OFFER
CONDITION BY YOUR ACTIONS OR FAILURE TO ACT RENDERS THE OFFERS ILLUSORY.
PLEASE REVISE HERE AND ON PAGE 20.
RWCI and RWI acknowledge the Staff's comment and have revised Section 5
of the Offers to Purchase to clarify that in the case of an action or inaction
of the Offeror giving rise to the Offeror's assertion of a condition of the
Offers, such action or inaction must be unintentional, as follows:
The first sentence in the second paragraph on page 19 of the Offers to
Purchase and Circular is hereby amended and restated in its entirety as
follows:
"The foregoing conditions are for the exclusive benefit of the Offeror
and may be asserted by the Offeror regardless of the circumstances giving
rise to such assertion, including any unintentional action or inaction by
the Offeror, or, subject to the terms of the Support Agreement, may be
waived by the Offeror in whole or in part, at any time and from time to
time, prior to the Expiry Time without prejudice to any other rights
which the Offeror may have."
The first sentence in the second paragraph on page 20 of the Offers to
Purchase and Circular under the caption "Conditions of the Class B Offer
and the Warrant Offers" is hereby amended and restated in its entirety as
follows:
"The foregoing condition to the Class B Offer and Warrant Offers is for
the exclusive benefit of the Offeror and may be asserted by the Offeror
regardless of the circumstances giving rise to such assertion, including
any unintentional action or inaction by the Offeror, or, subject to the
terms of the Support Agreement, may be waived by the Offeror in whole or
in part, at any time and from time to time, prior to the Expiry Time
without prejudice to any other rights which the Offeror may have."
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SECTION 5. EXTENSION AND VARIATION OF THE OFFERS, PAGE 20
5. REFER TO THE LAST SENTENCE IN THE FIRST PARAGRAPH ON PAGE 21 AND OUR
COMMENT BELOW REGARDING THE MEANING OF "TAKEN UP" AS USED IN THE OFFER
MATERIALS. IT IS UNCLEAR HOW YOU MAY "TAKE UP" SHARES TENDERED BUT ALSO
EXTEND THE OFFERS. PLEASE REVISE TO CLARIFY.
RWCI and RWI have been advised by their Canadian counsel that under
Canadian securities laws, the U.S. concept of a "Subsequent Offering Period"
is treated for Canadian securities law purposes as an extension of the
original Offers. This post-take up extension period is, for U.S. purposes, a
Subsequent Offering Period. Just as under the U.S. tender offer rules
governing Subsequent Offering Periods, such an extension under Canadian
securities laws can only occur after the Offeror has "taken up" or "accepted
for payment" (as such terms are clarified in response 10 below) the tendered
Securities and paid for such Securities. If the Offeror did not extend the
Offers under Canadian law after it had taken up and paid for those Securities
tendered and not withdrawn at the initial Expiry Time and thereafter sought to
make an offer for additional Securities, it would be required to commence new
tender offers for the Securities and restart the 35-day tender offer period
mandated by Canadian securities law in respect of such additional Securities.
The extension referred to in the last sentence of the first paragraph on
page 21 relates to an extension of the original Offers after the conditions to
the Offers have been satisfied or waived and Securities have been "taken up"
or "accepted for payment", i.e., a Subsequent Offering Period under U.S.
tender offer rules. RWCI and RWI have clarified the disclosure in the last
sentence of the first paragraph on page 21 as follows:
The last sentence of the first paragraph on page 21 of the Offers to
Purchase and Circular is hereby amended and restated in its entirety as
follows:
"Notwithstanding the foregoing, but subject to applicable law, in the
event all of the terms and conditions of the Offer, except those waived
by the Offeror, have been fulfilled or complied with, the Offeror may not
extend such Offer past the then current Expiry Time unless the Offeror
first takes up all Shares or Warrants validly deposited under such Offer
and not withdrawn. Any such extension would be a Subsequent Offering
Period."
6. ON PAGE 22, YOU STATE THAT A SUBSEQUENT OFFER PERIOD MAY CONSTITUTE AN
EXTENSION OF THE APPLICABLE OFFER UNDER CANADIAN SECURITIES LAWS. CLARIFY
THE EFFECT OF SUCH AN EXTENSION FOR CANADIAN AND/OR OTHER TENDERING
SECURITY HOLDERS. THAT IS, WHAT IS THE IMPACT OF DEEMING THIS AN
EXTENSION RATHER THAN A SEPARATE AND DISTINCT PART OF THE OFFERS?
As discussed in response 5 above, RWCI and RWI have been advised by their
Canadian counsel that under Canadian securities laws, the U.S. concept of a
"Subsequent Offering Period" is treated for Canadian securities law purposes
as an extension of the
7
original Offers. RWCI and RWI have clarified the disclosure in the first
sentence of the second paragraph on page 22 as follows:
The first sentence of the second paragraph on page 22 of the Offers to
Purchase and Circular is hereby amended and restated in its entirety as
follows:
"A Subsequent Offering Period, if one is included, does not constitute an
extension of the applicable Offer for purposes of the Exchange Act,
although it does constitute an extension of the applicable Offer under
Canadian securities laws. Under Canadian securities laws, in order for
the Offeror to take up and pay for additional Securities deposited after
the initial Expiry Time, the Offeror must either (i) extend such Offer in
accordance with Canadian securities laws (which extension would be
treated as a Subsequent Offering Period in the United States) or (ii)
initiate a new offer in respect of such Securities, which new offer could
not be consummated for at least 35 days."
SECTION 6. WITHDRAWAL OF DEPOSITED SECURITIES, PAGE 23
7. YOUR DISCUSSION OF THE WITHDRAWAL RIGHTS PROVIDED IN THESE OFFERS IS
CONVOLUTED AND SHOULD BE REVISED GENERALLY TO PRESENT THIS CRITICAL
INFORMATION IN A CLEAR, CONCISE MANNER. THE DISCUSSION OF WITHDRAWAL
RIGHTS IN SUBPARAGRAPH (B) IN THIS SECTION IS PARTICULARLY CONFUSING AND
IS NOT LIKELY TO BE UNDERSTANDABLE TO SHAREHOLDERS OF MICROCELL. THE
FOLLOWING ARE SOME SPECIFIC QUESTIONS RAISED BY THE EXISTING DISCLOSURE
HERE. YOU SHOULD ADDRESS THESE ISSUES, BUT YOU SHOULD ALSO REVISE THIS
SECTION GENERALLY IN ACCORDANCE WITH THIS COMMENT. PLEASE BE AWARE THAT
WE MAY HAVE ADDITIONAL COMMENTS AFTER WE REVIEW YOUR REVISIONS.
RWCI and RWI have revised Section 6 of the Offers to Purchase as
described in responses 8-11 below. In addition, RWCI and RWI have clarified
subparagraph (a) as follows:
Subparagraph (a) on page 23 of the Offers to Purchase and Circular is
amended and restated in its entirety as follows:
"(a) at any time before the Securities have been taken up by the
Offeror;"
8
8. THE DISCLOSURE IN SUBPARAGRAPH (B) SEEMS TO INDICATE THAT IF A MAJOR
CHANGE OR VARIATION OCCURS IN THE TERMS OF ONE OR MORE OF THE OFFERS,
WITHDRAWAL RIGHTS WILL EXIST FOR TEN DAYS AFTER NOTICE OF THE CHANGE
UNLESS THE TENDERED SECURITIES "HAVE BEEN TAKEN UP THE OFFEROR AT THE
DATE OF SUCH NOTICE." AS DISCUSSED, WE HAVE QUESTIONS ABOUT THE
DEFINITION OF "TAKEN UP" AS USED IN THE OFFER DOCUMENTS. HOWEVER, WE ARE
UNCLEAR AS TO HOW YOU COULD EVER TERMINATE WITHDRAWAL RIGHTS WHILE THE
OFFERS REMAIN OPEN. ARE YOU REFERRING TO ADDITIONAL WITHDRAWAL RIGHTS
PROVIDED AFTER WHAT WOULD GENERALLY BE CONSIDERED EXPIRATION OF THESE
OFFERS? PLEASE CLARIFY.
The definition of "take up" is clarified in response 10 below. As noted
in subparagraph (a) of Section 6 of the Offers to Purchase on page 23, holders
of Securities may withdraw such Securities at any time prior to the take up of
such Securities. Subparagraph (b) does not negate any withdrawal rights the
holders of Securities have under other subparagraphs, including subparagraph
(a). The withdrawal rights in subparagraph (b) relate only to the Subsequent
Offering Period. For greater clarity, subparagraph (b) of Section 6 of the
Offers to Purchase has been revised to explicitly make reference to the
Subsequent Offering Period. The full restated text of subparagraph (b) is
included in response 9 below.
9. REFERRING AGAIN TO SUBPARAGRAPH (B), YOU SEEM TO INDICATE IN SUBPARAGRAPH
(III) THAT YOU WILL NOT PROVIDE A TEN-DAY EXTENSION SOLELY FOR A WAIVER
OF A CONDITION TO THE OFFERS. ALTHOUGH RULE 14E-1(B) SPECIFICALLY
MANDATES A TEN-DAY EXTENSION FOR ONLY CERTAIN TYPES OF CHANGES TO THE
OFFERS, IT IS OUR POSITION THAT A TEN-DAY EXTENSION COULD BE REQUIRED
UNDER CIRCUMSTANCES OTHER THAN THOSE ENUMERATED IN RULE 14E-1(B). SEE THE
DISCUSSION IN SECTION II.E.2 OF "REGULATION OF TAKEOVERS AND SECURITY
HOLDER COMMUNICATIONS," SEC RELEASE NO. 33-7760. PLEASE REVISE.
RWCI and RWI acknowledge the Staff's comment and respectfully submit that
Section II.E.2 of SEC Release No. 33-7760 relates to exchange offers and
prospectuses, not all-cash tender offers. Moreover, RWCI and RWI have included
disclosure in the second paragraph on page 21 indicating that in the case of
certain changes to an Offer, such Offer will not expire (and thus the
applicable Securities will not be taken up) for at least 10 business days from
the date of such change. However, to add greater clarity, RWCI and RWI have
revised subparagraph (b) on page 23 as follows:
Subparagraph (b) on page 23 of the Offers to Purchase and Circular is
amended and restated in its entirety as follows:
"(b) during a Subsequent Offering Period, at any time before the
expiration of ten days from the date of a notice of change or variation
to one or more of the Offers; provided, however, that this right of
withdrawal will not apply (i) in respect of Securities taken up by the
Offeror prior to the Subsequent Offering Period, (ii) where a variation
of the terms of one or more of the Offers consists solely of an increase
in the consideration offered for the Securities and the period during
which Securities may be deposited pursuant to the Offer(s) is not
extended for more than ten days, or (iii) where a variation of the terms
of one or more of the
9
Offers consists solely of the waiver of a condition to such Offer(s) and
such waiver does not require an extension of the Subsequent Offering
Period under applicable laws;"
10. REFER TO COMMENTS 4 AND 7 ABOVE. PLEASE DEFINE THE PHRASE "TAKEN UP" AS
USED HERE TO DESCRIBE THE WITHDRAWAL RIGHTS PROVIDED IN THESE OFFERS. IS
THIS TERM SYNONYMOUS WITH "ACCEPTED," OR ARE YOU REFERRING TO ACTUAL
RECEIPT OF PAYMENT OR SOME OTHER EVENT? YOU USE THE PHRASE "ACCEPTED FOR
PAYMENT" LATER IN THIS SECTION, IN SUBPARAGRAPH (D), SO YOU ARE
APPARENTLY REFERRING TO SOME OTHER CONCEPT. PLEASE PROVIDE SIMILAR
CLARIFICATION ON PAGE 6 IN THE SUMMARY TERM SHEET AND ANYWHERE ELSE IN
THE OFFERS TO PURCHASE AND CIRCULAR WHERE WITHDRAWAL RIGHTS ARE
DISCUSSED.
RWCI and RWI have clarified the use of the terms "take up", "taking up"
and "taken up" as follows:
The Glossary to the Offers to Purchase and Circular is hereby amended by
adding the following definition on page 12 of the Offers to Purchase and
Circular after the definition of "Support Agreement":
"TAKE UP", in reference to Securities, means to accept such Securities
for payment by giving written notice of such acceptance to the
Depositary. "TAKING UP" and "TAKEN UP" have correlative meanings.
11. YOU STATE THAT YOU WILL PROVIDE WITHDRAWAL RIGHTS DURING ANY SUBSEQUENT
OFFERING PERIOD, IF THERE IS ONE, AT ANY TIME BEFORE TENDERED SECURITIES
ARE PURCHASED. EXPAND TO EXPLAIN HOW MECHANICALLY THIS WILL WORK. FOR
EXAMPLE, WHEN DO YOU CONSIDER THE PURCHASE TO OCCUR FOR PURPOSES OF
TERMINATING WITHDRAWAL RIGHTS? IS IT WHEN THE TENDERING SECURITY HOLDER
RECEIVES PAYMENT? HOW LONG GENERALLY WILL THIS TAKE? REVISE TO ADDRESS
THESE ISSUES.
As noted in Section 7 of the Offers to Purchase, "the Offeror will be
deemed to have taken up and accepted for payment Securities validly deposited
under the Offers and not withdrawn as, if and when the Offeror gives written
notice...to the Depositary". Section 7 also specifies that "receipt of payment
by the Depositary shall be deemed to constitute receipt thereof by Persons
depositing Securities". When all the terms and conditions of the Offers have
been complied with or waived, the Offeror will forthwith notify the TSX and
issue a press release over the Dow Jones News Wire Service (which will be
filed as an amendment to the Schedule TO) to that effect, which press release
will disclose the approximate number of Securities deposited in the Offers and
10
the approximate number that will be taken up. RWCI and RWI have amended
Section 6 of the Offers to Purchase as follows:
The third paragraph on page 24 of the Offers to Purchase and Circular is
hereby amended and restated in its entirety as follows:
"Notwithstanding the provisions of United States federal securities laws
relating to subsequent offering periods, the Offeror will permit
withdrawal of deposited Securities during any Subsequent Offering Period,
if there is one, at any time prior to such Securities being taken up by
the Offeror. When all the terms and conditions of the Offers have been
complied with or waived, the Offeror will forthwith notify the TSX and
issue a press release over the Dow Jones News Wire Service to that
effect, which press release will disclose the approximate number of
Securities deposited in the Offers and the approximate number that will
be taken up."
SECTION 7. TAKE UP AND PAYMENT FOR DEPOSITED SECURITIES, PAGE 24
12. REFER TO THE DISCLOSURE IN THE THIRD PARAGRAPH IN THIS SECTION. CLARIFY
WHETHER TENDERING SECURITY HOLDERS WILL HAVE WITHDRAWAL RIGHTS SHOULD YOU
RETAIN TENDERED SECURITIES PENDING RECEIPT OF REGULATORY APPROVALS.
Tendering Securityholders will have withdrawal rights should the Offeror
retain tendered Securities pending receipt of regulatory approvals. Section 7
of the Offers to Purchase states that the Offeror will take up (or delay
taking up) tendered Securities pursuant to Section 6 of the Offers to
Purchase. As discussed in subparagraphs (a) and (c) of Section 6,
Securityholders will have withdrawal rights at any time before the Securities
have been taken up by the Offeror or, after the Expiry Time, if Securities
have been taken up by the Offeror but not paid for within three days. Thus, if
Securities are tendered but the Offeror has delayed either taking them up or
paying for them pending receipt of regulatory approvals or for any other
reason, the tendering Securityholders will continue to have withdrawal rights
for the period of that delay. RWCI and RWI respectfully submit that the
reference in Section 7 to the withdrawal rights described in Section 6, in
conjunction with the revisions to Section 6 outlined above, adequately
addresses the withdrawal rights available to a Securityholder in the case of a
delay in the taking up of, or payment for, Securities, including a delay
related to a pending regulatory approval.
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SECTION 10. CHANGES IN CAPITALIZATION; DIVIDENDS AND DISTRIBUTIONS; LIENS,
PAGE 26
13. YOU STATE THAT THE OFFER PRICE MAY BE REDUCED BY ANY DIVIDEND OR
DISTRIBUTION PAYMENTS MADE BY THE COMPANY. WE BELIEVE THAT SUCH A
REDUCTION IS A CHANGE IN THE CONSIDERATION BEING OFFERED AND THAT TEN
BUSINESS DAYS MUST REMAIN IN THE OFFERS FOLLOWING THE CHANGE. SEE RULE
14E-1(B). PLEASE CONFIRM YOUR UNDERSTANDING SUPPLEMENTALLY.
RWCI and RWI supplementally confirm to the Staff that a reduction of the
offer price by any dividend or distribution payments made by the Company would
constitute a change in the consideration being offered and that ten business
days must remain in the Offers following the change. Please refer to page 26
of the Offers to Purchase, on which we discuss such changes and state that
"[i]n the event of any reduction in the amount paid per Share or Warrant under
the Offers resulting from a cash dividend, distribution or payment . . . , the
Offers will be extended, if necessary, . . . such that not less than ten
business days remain before the Offers expire."
SECTION 13. OTHER TERMS OF THE OFFERS, PAGE 27
14. THE DISCLOSURE AT THE TOP OF PAGE 28 STATES THAT "[T]HE OFFERS AND ALL
CONTRACTS RESULTING FROM THE ACCEPTANCE OF THE OFFERS SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE PROVINCE OF ONTARIO
AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN. EACH PARTY TO ANY
AGREEMENT RESULTING FROM THE ACCEPTANCE OF THE OFFERS UNCONDITIONALLY AND
IRREVOCABLY ATTORNS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE
PROVINCE OF ONTARIO." THIS LANGUAGE DOES NOT MENTION THAT THE OFFERS ARE
SUBJECT TO THE UNITED STATES FEDERAL SECURITIES LAWS. IT ALSO
IMPERMISSIBLY IMPLIES THAT SECURITY HOLDERS WHO TENDER INTO THESE OFFERS
HAVE FORFEITED CLAIMS UNDER THE US SECURITIES LAWS. PLEASE REVISE TO
CLARIFY THE EXTENT OF THE PROTECTIONS AFFORDED UNDER US LAW.
RWCI and RWI acknowledge the Staff's comment and have amended the disclosure
at the top of page 28 to read as follows:
The last paragraph on page 27 of the Offers to Purchase and Circular is
hereby amended and restated in its entirety as follows:
"The Offers and all contracts resulting from the acceptance of the Offers
shall be governed by and construed in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein.
Each party to any agreement resulting from the acceptance of the Offers
unconditionally and irrevocably attorns to the exclusive jurisdiction of
the courts of the Province of Ontario. The foregoing shall not restrict
the applicability to the Offers of the securities laws of the United
States or any other applicable jurisdiction. However, Securityholders
should be aware that the enforcement by Securityholders of civil
liabilities under United States federal securities laws may be affected
adversely by the fact that the Offeror is governed by the laws of Canada,
that the majority of its officers and directors reside outside the United
States, that some of the Dealer Managers or experts named in the Offers
12
to Purchase and Circular reside outside the United States and that all or
a substantial portion of the assets of the Offeror and said persons may
be located outside the United States. Securityholders may not be able to
sue a foreign company or its officers or directors in a foreign court for
violations of United States federal securities laws. It may be difficult
to compel a foreign company and its affiliates to subject themselves to a
U.S. court's judgment."
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If you have any questions regarding the contents of this letter,
please contact me at the above number.
Respectfully,
/s/ John T. Gaffney
John T. Gaffney
Christina Chalk, Esq.
Office of Mergers and Acquisitions
Division of Corporate Finance
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549