Loblaw Companies Limited has entered into an automatic share purchase plan (ASPP) that will allow it to acquire additional common shares of EQB following the completion of the sale of President’s Choice Financial and related businesses to EQB.
The announcement, made on 14 July, forms part of Loblaw’s long-term strategic relationship with EQB after transferring ownership of President’s Choice Bank earlier this month.
Under the agreement, Loblaw has appointed a broker to purchase EQB shares automatically when the retailer is not in possession of material non-public information. The arrangement complies with Toronto Stock Exchange requirements and Canadian securities regulations.
The broker may purchase enough shares to increase Loblaw’s holdings to a maximum of 10.6 million EQB common shares, provided the retailer’s ownership does not exceed 24.9% of EQB’s outstanding shares at any time.
Loblaw said the automatic purchase plan will end once that limit has been reached or earlier if terminated under the agreement. Outside the plan, the retailer may continue buying EQB shares where permitted by law.
The company also confirmed that the Ontario Securities Commission has granted exemptive relief allowing certain shares received during EQB’s acquisition of President’s Choice Financial to be excluded from regulatory ownership calculations for future market purchases.
The announcement follows the completion of EQB’s acquisition of President’s Choice Bank, a transaction that enables Loblaw to maintain a long-term financial services partnership while reducing its direct ownership of the banking business.
What is an Automatic Share Purchase Plan?
An automatic share purchase plan (ASPP) allows a company to buy shares according to pre-set rules through an independent broker. The arrangement enables purchases to continue even during periods when company executives may be restricted from trading because of insider information.
What happens next?
Loblaw’s broker will begin purchasing EQB shares within the limits set out in the agreement until the maximum ownership threshold is reached or the plan is ended. The move reinforces Loblaw’s long-term strategic relationship with EQB while allowing the retailer to retain a significant investment in its new banking partner.
