Share Purchase Offer - Short Form

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Introduction

When a business becomes a company/corporation, or a private legal person as defined in the Civil Code of Quebec, the transfer of the business can be achieved either by the sale of its business (see series Y02 of the Business Precedents) or by the sale of at least a majority of the issued and outstanding voting shares of the latter to a new buyer.

A transfer of business by way of a sale of shares can be launched in various ways. Some sales begin with a simple letter of intent (see document Y04.200 of the Business Precedents) summarizing the broad outlines of the operation followed by a sale of shares agreement (see document Y04.500 or Y04.550 of the Business Precedents) containing all the terms of the sale. Others are initiated by submitting a very detailed offer to purchase followed by a closing certificate (see document Y04.600 of the Business Precedents) and the execution of ancillary documents required to complete the contractual framework of said transaction.

This document establishes, in a less detailed manner than document Y04.275 of the Business Precedents (Offer to purchase shares stock – long form), all the financial, legal and commercial component which are normally found in an offer to purchase shares.

Description

The Offer to Purchase Shares is the legal instrument by which a person, known as the "OFFEROR", offers to another person, called the "OFFEREE", to acquire part or all of the shares it holds in a corporation / company, in compliance with the price and the manner specified in the offer.

Use

This document is an alternative to the letter of intent to purchase shares (see document Y04.200 of the Business Precedents), in the sale/purchase of share documentary process, whose primary function is to further the transaction without definitively binding the parties.

We recommend the use of this document as part of a proposed purchase, when the offeror wishes the offeree to immediately accept the legal framework of the entire sale to come, so as to avoid that the transaction be aborted in the event that a disagreement occurs on any of the unspecified terms, as can happen when the process is launched by a simple letter of intent.

In the event of a minimized documentary process, this offer may be followed by a Share Purchase Closing Certificate (see document Y04.600 of the Business Precedents), rather than a sale of shares agreement similar to what appears in the documents Y04.500 or Y04.550 of the Business Precedents.

Because the following document contains a short version of an Offer to Purchase Shares rather than a detailed version (see document Y04.275 of the Business Precedents) it is better suited to transactions with lower economic issues or scenarios of sale between shareholders having a detailed understanding of the activities of the business. It can also be used in a progressive documentation of the transaction in order not to intimidate the vendor at the beginning of the transaction, by using, in the offer, an omnibus provision as a bridge between the Offer to Purchase Shares (short form) and a Share Purchase Agreement (long form) (see document Y04.550 of the Business Precedents).

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