SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
======================
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Abitibi-Consolidated Inc.
(Exact name of registrant as specified in its
articles of incorporation)
Canada 98-0171273
(Jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
1155 Metcalfe Street, Suite 800
Montreal, Quebec H3B 5H2
(Address of principal executive offices) (Zip Code)
If this form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), please check the following box. |_|
If this form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), please check the following box. |X|
Securities Act registration statement file number to which this form relates:
N/A
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which each
to be so registered class is to be registered
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None None
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class to be so registered
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Rights to Purchase Common Shares
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Item 1. Description of Registrant's Securities to be Registered. On November 8,
1999, the Board of Directors of Abitibi-Consolidated Inc., a Canadian
corporation (the "Company"), authorized the Company to enter into a shareholder
rights plan agreement (the "Rights Plan") with Montreal Trust Company, as Rights
Agent. The Rights Plan has a term of three years and will expire at the close of
business (the "Expiration Time") on the date the Company's annual meeting is
held in 2003, unless the rights (the "Rights") issued thereunder are earlier
redeemed or exchanged by the Company.
Purpose of the Rights Plan
The Rights Plan is designed to ensure fair treatment of shareholders in the
context of a take-over bid for the Company such as the Offer. The Rights Plan
was adopted by the Board of Directors on the advice and recommendation of a
special committee of its directors. The special committee and the Board of
Directors also received financial advice from Credit Suisse First Boston
Corporation who recommended adoption of the Rights Plan.
The Rights Plan addresses the Board's concern that existing Canadian and
U.S. securities legislation (which requires that a take-over bid remain open for
only 21 days or 20 business days, respectively) does not provide sufficient time
for the shareholders to properly consider and respond to an offer and for the
Board of Directors to determine whether there may be alternatives available to
maximize shareholder value or whether other bidders may be prepared to pay more
for the Company's shares than an offeror The Rights Plan will provide the Board
of Directors and the shareholders with more time to fully consider any
unsolicited take-over bid for the Company, without undue pressure; will allow
the Board of Directors to pursue, if appropriate, other alternatives to maximize
shareholder value; and will allow additional time for competing bids to emerge.
Under the Rights Plan, a bidder making a Permitted Bid (as defined below)
for Common Shares may not take up any shares before the close of business on the
50th day after the date of the bid and unless at least 50% of the Common Shares
not Beneficially Owned (as defined below) by the person making the bid and
certain related parties are deposited under the bid, in which case the bid must
be extended for a further 10 business days. The Rights Plan is intended to
encourage an offeror to proceed by way of a Permitted Bid or to approach the
Board with a view to negotiation by creating the potential for substantial
dilution of the offeror's position. The Permitted Bid provisions of the Rights
Plan are designed to ensure that, in any take-over bid, all shareholders are
treated equally, and are given adequate time to properly assess the bid on a
fully informed basis.
In recent years, unsolicited bids were made for the shares of a number of
Canadian and U.S. public companies. Most of these companies had shareholder
rights plans which were used by the target's board of directors to gain time to
seek alternatives to the bid with the objective of enhancing shareholder value.
In a number of these transactions, a change of control ultimately occurred at a
price in excess of the original bid price, demonstrating that the existence of
the Rights Plan will not necessarily prevent successful unsolicited take-over
bids for the Common Shares.
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The issuance of Rights will not change the manner in which shareholders
currently trade their Common Shares. Shareholders do not have to return their
certificates in order to have the benefit of the Rights.
Terms of the Rights Plan
The following is a summary of the principal terms of the Rights Plan and is
qualified in its entirety by the full text of the Rights Plan, which was filed
with the Securities and Exchange Commission on November 12, 1999 as an exhibit
to the Company's Material Change Report filed on Form 6-K.
Issue of Rights
To implement the Rights Plan, the Board authorized the issue at 5:00 p.m.
(Toronto time) on November 8, 1999 (the "Record Time") of one right (a "Right")
in respect of each outstanding Common Share to holders of record at the Record
Time. The Board also authorized the issue of one Right in respect of each Common
Share issued after the Record Time and prior to the Expiration Time. The Company
has entered into the Rights Agreement dated as of November 8, 1999 with Montreal
Trust Company, as rights agent, which provides for the exercise of the Rights,
the issue of certificates evidencing the Rights and other related matters.
Separation Time
Until the Separation Time, the Rights will trade together with the Common
Shares, will be represented by the Common Share certificates and will not be
exercisable. Certificates for the Common Shares issued after the Record Time but
prior to the earlier of the Separation Time and the Expiration Time will bear a
legend incorporating the Rights Agreement by reference. Promptly following the
Separation Time, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to the holders of record of Common Shares as of
the Separation Time. After such time, the Rights Certificate alone will
represent the Rights, the Rights will be transferable separately from the Common
Shares and will be exercisable.
The "Separation Time" is the close of business on the tenth business day
(or such later day as may be determined by the Board) after the earlier of:
(a) the date of the first public announcement of facts indicating that a
person has become an Acquiring Person (as defined below);
(b) the date of the commencement of, or first public announcement of the
intent of any person (other than the Company or a subsidiary of the
Company) to commence a take-over bid (other than a Permitted Bid or a
Competing Permitted Bid (each as defined below)) to acquire Beneficial
Ownership of shares of the Company to which is attached a right to
vote for the election of directors generally ("Voting Shares"), which
together with such person's Voting Shares, constitute in the aggregate
more than 20 percent of the Common Shares; and
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(c) two days following the date upon which a Permitted Bid or Competing
Permitted Bid (each as defined below) ceases to be such.
After the Separation Time, and prior to the Expiration Time, each Right may
be exercised to purchase one Common Share of the Company at the Exercise Price
(as defined below).
Permitted Bid and Competing Permitted Bid
A "Permitted Bid" is defined in the Rights Agreement as a take-over bid
made by take-over bid circular which complies with the following requirements:
(a) the take-over bid is made to all holders of Voting Shares;
(b) Voting Shares may be deposited under the bid any time between the date
of the bid and the date Voting Shares are taken up and paid for, and
any Voting Shares deposited under the bid may be withdrawn until taken
up and paid for; and
(c) the take-over bid must be open for at least 50 days and more than 50%
of the outstanding Voting Shares (other than shares Beneficially Owned
by the offer or on the date of the bid) must be deposited under the
bid and not withdrawn before any shares may be taken up and paid for
and, if 50% of the Voting Shares are so deposited and not withdrawn,
an announcement of such fact must be made and the bid must remain open
for a further 10 business day period.
A "Competing Permitted Bid" is a take-over bid that is made after a
Permitted Bid has been made, but prior to its expiry, and satisfies all
requirements of a Permitted Bid as described above, except that a Competing
Permitted Bid is not required to remain open for 50 days so long as it is open
until the later of 21 days after the date the Competing Permitted Bid was made
and 50 days after the earliest date on which a Permitted Bid then in existence
was made.
Acquiring Persons
In general, an Acquiring Person is a person who is the Beneficial Owner of
20% or more of the Company's outstanding Voting Shares. Currently, no Voting
Shares other than the Common Shares are outstanding. Excluded from the
definition of "Acquiring Person" are the Company and its subsidiaries and any
person who becomes the Beneficial Owner of 20% or more of the outstanding Voting
Shares as a result of one or any combination of a Voting Share Reduction, a
Permitted Bid Acquisition, an Exempt Acquisition and a Permissible Acquisition.
Under the Rights Plan:
(a) a "Voting Share Reduction" is an acquisition or redemption by the
Company of Voting Shares;
(b) a "Permitted Bid Acquisition" is an acquisition of Voting Shares made
pursuant to a Permitted Bid or a Competing Permitted Bid;
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(c) an "Exempt Acquisition" is a share acquisition in respect of which the
Board of Directors has waived the application of the Rights Plan or
which was made prior to the date of the Rights Plan; and
(d) a "Permissible Acquisition" is an acquisition of Voting Shares as a
result of: (i) a stock dividend, a stock split or other event in
respect of securities of one or more particular classes or series of
Voting Shares pursuant to which such shares are received on the same
pro rata basis by all holders of the same class or series; (ii) an
acquisition pursuant to a dividend reinvestment plan or other plan
made available by the Company to all holders of the same class of its
Voting Shares; (iii) the acquisition or exercise of share purchase
rights issued to all or substantially all the holders of Voting Shares
pursuant to a rights offering or a prospectus, or a distribution of
Voting Shares or convertible securities issued by the Company pursuant
to a prospectus or by way of private placement, provided that the
acquisition does not increase the acquiror's percentage holding of
Voting Shares; or (iv) the exercise of any convertible securities
acquired pursuant to any of the foregoing.
Beneficial Ownership
In general, a person "Beneficially Owns" Voting Shares held by the person
and Voting Shares held by others in circumstances where those holdings are or
should be grouped together for purposes of the Rights Plan. Included are
holdings by the person's "Affiliates" (generally, a person that controls, is
controlled by, or under common control with the other person) and "Associates"
(generally, the spouse or relatives of the person sharing the person's
residence). Also included are securities which the person or any of the person's
Affiliates or Associates has the right to acquire within 60 days (other than
customary agreements with and between underwriters and banking or selling group
members with respect to a distribution of securities, and other than pledges of
securities in the ordinary course of business). A person is also deemed to
"Beneficially Own" any securities that are Beneficially Owned by any other
person with which the person is acting jointly or in concert.
The definition of "Beneficial Ownership" contains several exclusions
whereby a person is not considered to "Beneficially Own" a security. There are
exemptions from the deemed "Beneficial Ownership" provisions for institutional
shareholders acting in the ordinary course of business. These exemptions apply
to: (i) an investment manager ("Investment Manager") that holds securities in
the ordinary course of business in the performance of its duties for the account
of any other person; (ii) a licensed trust company ("Trust Company") acting as
trustee or administrator or in a similar capacity in relation to accounts of
deceased or incompetent persons or in relation to other accounts; (iii) the
administrator or the trustee (a "Plan Trustee") of one or more pension funds or
plans (a "Plan") registered under applicable laws and holds such security for
the purpose of its activity as such; or (iv) a Crown agent or an agency (a
"Statutory Body") established by statute, the ordinary business or activity of
which includes the management of investment funds for employee benefit plans,
pension plans, insurance plans, or various public bodies. The foregoing
exemptions only apply so long as the Investment Manager, Trust Company, Plan
Trustee, Statutory Body or Crown agent is not then making or has not then
announced an intention to make a take-over bid,
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other than offer to acquire Voting Shares or other securities pursuant to a
distribution by the Company or certain market transactions made in the ordinary
course of business.
A person will not be deemed to "Beneficially Own" a security because (i)
the person is a client of the same Investment Manager, an account of the same
Trust Company, or a pension plan with the same Plan Trustee as another person or
pension plan on whose account the Investment Manager, Trust Company or Plan
Trustee, as the case may be, holds such security; (ii) the person is a client of
an Investment Manager, account of a Trust Company or a pension plan of a Plan
Trustee, and the security is owned by the Investment Manager, Trust Company or
Plan Trustee, as the case may be; or (iii) the person is the registered holder
of securities as a result of carrying on the business of or acting as a nominee
or security depositary.
Permitted Lock-up Agreements
The Rights Plan does not preclude the entering into of lock-up agreements
so long as they are made available to the public and the Company not later than
the date of the bid (or the date the agreement is entered into if made after the
date of the bid), and provided:
(a) that they may be terminated at the option of the shareholder (the
"Locked-up Person") if another bid is made (i) at a price or value in
excess of the price offered under the bid to which the Locked-up
Person originally agreed to tender its Voting Shares (the "Lock-up
Bid"), provided such price is not greater than 7% of the price or
value per share offered under the Lock-up Bid, or (ii) for at least 7%
more Voting Shares than was sought under the Lock-up Bid and at a
price or value not less than that offered under the Lock-up Bid; and
(b) no "break-up" or similar fees are payable if the Locked-up Person
fails to tender its Voting Shares pursuant thereto that exceed the
greater of 2 1/2% of the consideration payable under the Lock-up Bid
to the Locked-up Person, or one half of any amount in excess of the
consideration payable under the Lock-up Bid that the Locked-up Person
receives under another bid or transaction.
Flip-in Event and Exchange Option
Under the Rights Agreement, a Flip-in Event is any transaction or event in
which any person becomes an Acquiring Person. Upon the occurrence of a Flip-in
Event, except as set out below, from and after the close of business on the
tenth trading day following the Common Share Acquisition Date:
(a) any Rights Beneficially Owned by the Acquiring Person (including
transferees) will become void; and
(b) each Right (other than Rights which are void) will entitle the holder
thereof to purchase Voting Shares having a market price of twice the
Exercise Price (as defined below) for an amount equal to the Exercise
Price (as defined below).
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Accordingly, a Flip-in Event that is not waived by the Board of Directors will
result in significant dilution to an Acquiring Person. See "Redemption and
Waiver" below.
The Rights Plan also permits the Board of Directors to authorize the
Company, after a Flip-in Event has occurred, to issue or deliver, in return for
outstanding Rights and on payment of the relevant exercise price, debt, equity
or other securities or assets (or a combination thereof) of the Company. If the
Board of Director authorizes such an exchange, the right to exercise Rights will
terminate and the only right thereafter of a holder of Rights will be to receive
the debt or equity security or assets (or combination thereof) in accordance
with the exchange formula authorized by the Board of Directors.
Exercise Price and Anti-Dilution Adjustments
The price at which a holder of a Rights may purchase the Voting Shares
issuable upon exercise of such Right (the "Exercise Price") will initially be
$80.00 per Right. The Exercise Price of a Right, the number and kind of
securities subject to purchase upon exercise of a Right, and the number of
Rights outstanding, will be adjusted in certain events, including:
(a) if there is a stock dividend (other than pursuant to any dividend
reinvestment plan or other plan generally made available by the
Company to all holders of its Voting Shares) on the Common Shares, or
a subdivision or consolidation of the Common Shares, or an issuance of
Common Shares in respect of, in lieu of or in exchange for Common
Shares; or
(b) if the Company fixes a record date for the distribution to all holders
of Common Shares of certain rights, options or warrants to acquire
Common Shares having a conversion, exchange or exercise price per
share less than the market price per share such record date, or for
the making of a distribution to all holders of Common Shares of
evidences of indebtedness or assets (other than regular periodic cash
dividends or stock dividends payable in Common Shares) or other
securities.
Redemption and Waiver
(a) Redemption of Rights. The Board of Directors may, with the prior
approval of shareholders, prior to the occurrence of the relevant
Flip-In Event elect to redeem all but not less than all of the then
outstanding Rights at a redemption price of $.00001 per Right,
appropriately adjusted for anti-dilution as provided in the Rights
Agreement (the "Redemption Price").
(b) Redemption of Rights on Withdrawal or Termination of Bid. Where a
take-over bid that is not a Permitted Bid is withdrawn or otherwise
terminated after the Separation Time and prior to the occurrence of a
Flip-in Event, the Board of Directors may elect to redeem all the
outstanding Rights at the Redemption Price, whereupon all the
provisions of the Rights Plan shall continue to apply as if the
Separation Time had not occurred and Rights certificates had not been
mailed, and the Separation Time shall be deemed not to have occurred.
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(c) Permitted Bid Acquisition. In the event of a successful Permitted Bid
or Competing Permitted Bid, the Board of Directors shall be deemed to
have elected to redeem the Rights at the Redemption Price.
(d) Waiver of Inadvertent Acquisition. The Board of Directors may waive
the application of the Rights Plan in respect of the occurrence of any
Flip-in Event if (i) the Board of Directors has determined, following
the Voting Share Acquisition Date, that a person became an Acquiring
Person under the Rights Plan through inadvertence, and (ii) the
Acquiring Person agrees to reduce its Beneficial Ownership of Voting
Shares such that the person is no longer an Acquiring Person.
(e) Discretionary Waiver with Mandatory Waiver of Concurrent Bids. The
Board of Directors may, prior to the occurrence of the relevant
Flip-in Event, waive the application of the Rights Plan to a Flip-in
Event that may occur by reason of a take-over bid made by take-over
bid circular to all holders of record of Voting Shares. However, if
the Board of Directors waives the application of the Rights Plan, the
Board of Directors shall be deemed to have waived the application of
the Rights Plan in respect of any other Flip-in Event occurring by
reason of such a take-over bid made prior to the expiry of a bid for
which a waiver is, or is deemed to have been, granted.
(f) Waiver of Non-Take-over Bid Acquisitions. The Board of Directors may,
prior to the occurrence of the relevant Flip-in Event, with the prior
consent of shareholders, waive the application of the Rights Plan to a
Flip-in Event that may occur by reason of an acquisition of Voting
Shares otherwise than pursuant to a take-over bid made by means of a
take-over bid circular to all holders of record of Voting Shares.
If the Board of Directors is deemed to have elected or elects to redeem the
Rights as described above, the rights to exercise the Rights will thereupon,
without further action and without notice, terminate and the only right
thereafter of the holders of Rights is to receive the Redemption Price. Within
10 days of any such election or deemed election to redeem the Rights, the
Company will notify the holders of the Voting Shares or, if after the Separation
Time, the holders of the Rights.
Supplements and Amendments
The Board of Directors may amend the Rights Plan in order to cure any
clerical or typographical error therein, or that are necessary to maintain the
validity of the Rights Agreement and the Rights as a result of any change in any
applicable legislation or regulation.
Expiration
The Rights will expire at the Expiration Time, unless the Rights are
earlier redeemed by the Company.
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Regulatory and Shareholder Approvals
Any obligation of the Company or action contemplated by the Rights Plan
shall be subject to the receipt of any requisite approval or consent from any
applicable regulatory authority including, without limiting the generality of
the foregoing, any necessary approvals of any stock exchange.
In order to remain effective, the Rights Plan must be confirmed within six
months of the date of its adoption by at least a majority of the votes cast in
connection therewith by the holders of all outstanding Common Shares (being the
only Voting Shares of the Company outstanding). It is proposed that such vote
regarding the ratification of the Rights Plan will be conducted at a
shareholders' meeting tentatively scheduled for April 27, 2000.
Disadvantages of a Rights Plan
The Rights Plan could have the effect of deterring tender offers or take-over
attempts, even though such an offer or attempt might appear to shareholders to
be beneficial, and could make it more difficult for the holder of a large block
of the common shares to assume control of the Company. In addition, it has been
argued that rights plans, in general, have the effect of entrenching management
by discouraging certain take-overs which are not favored by management.
Existing Anti-Takeover Provisions
Under the Company's Articles of Amalgamation, the Board of Directors may issue
an unlimited number of additional common shares. Although the Board of Directors
has no current intention of doing so, such shares could be issued in a manner
that would make an acquisition of the Company more difficult.
Item 2. Exhibits.
1. Shareholder Rights Plan Agreement dated as of November 8, 1999, between the
Company and Montreal Trust Company, as Rights Agent, including the Form of
Rights Certificate attached thereto as Exhibit A (incorporated by reference
to the Company's Material Change Report on Form 6-K, filed on November 12,
1999 with the Securities and Exchange Commission).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
ABITIBI-CONSOLIDATED INC.
(Registrant)
Date: December 30, 1999 By: /s/ John W. Weaver
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Name: John W. Weaver
Title: President and Chief Executive Officer
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EXHIBIT INDEX
1. Shareholder Rights Plan Agreement dated as of November 8, 1999, between
Abitibi-Consolidated Inc. (the "Company") and Montreal Trust Company, as
Rights Agent, including the Form of Rights Certificate attached thereto as
Exhibit A (incorporated by reference to the Company's Material Change
Report on Form 6-K, filed on November 12, 1999 with the Securities and
Exchange Commission).
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