TORONTO, Feb. 28 /CNW/ - On February 28, 2003, Sears Canada Inc. ("Sears
Canada") (TSX: SCC) announced that it has filed a notice of a Normal Course
Issuer Bid that permits it to purchase for cancellation up to 5% of its issued
and outstanding common shares, representing 5,338,577 of the issued and
outstanding common shares ("Shares"). There are currently 106,771,530 Shares
issued and outstanding.
The purchases may commence on March 4, 2003 and must terminate by March
3, 2004 or on such earlier date as Sears Canada may complete its purchases
pursuant to the Notice of Intention filed with the Toronto Stock Exchange
By purchasing Shares under this Normal Course Issuer Bid, Sears Canada
intends to offset the dilutive effect of Shares issued as equity-based
compensation to employees and directors and may purchase additional Shares, if
in the opinion of management, the additional purchases can be made on terms
that enhance the value of the remaining Shares.
Sears, Roebuck and Co. ("Sears Roebuck") owns approximately 54% of the
outstanding Shares. The effect of Sears Canada making purchases under the
Normal Course Issuer Bid would be that Sears Roebuck's percentage ownership of
Shares would increase proportionately. In order to avoid that result, Sears
Canada has agreed to purchase Shares from Sears Roebuck in accordance with an
exemption from the TSX, which permits it to purchase Shares in accordance with
the procedure described below.
Sears Canada cannot make purchases from Sears Roebuck during any
financial quarter ("Quarter") unless it purchased Shares from other
shareholders during that Quarter pursuant to its Normal Course Issuer Bid. The
number of Shares that Sears Canada may purchase from Sears Roebuck in respect
of any given Quarter must be equal to and cannot exceed the number of Shares
that would reduce Sears Roebuck's percentage shareholdings to the level, as a
percentage, immediately prior to the purchases pursuant to the Normal Course
Issuer Bid (the "Maximum Percentage Holding").
Sears Roebuck will sell Shares to Sears Canada until such time as it
elects not to do so in respect of any ensuing Quarter. If Sears Roebuck
determines not to participate and sell Shares to Sears Canada so as to reduce
Sears Roebuck's percentage shareholdings to the Maximum Percentage Holding,
the exemption will cease and Sears Canada will not be entitled to make any
further purchases from Sears Roebuck pursuant to the exemption. In such event,
Sears Canada will issue a press release prior to the commencement of the
relevant Quarter indicating that Sears Roebuck will not participate and
stating Sears Canada's intention to continue the Normal Course Issuer Bid.
Subject to the above paragraph, in respect of each Quarter, Sears Canada
must offer to purchase from Sears Roebuck, and Sears Roebuck must sell, the
number of Shares that would reduce Sears Roebuck's shareholdings to its
Maximum Percentage Holding.
All trades between Sears Canada and Sears Roebuck must occur within 5
trading days following the end of the relevant Quarter.
The consideration per share received by Sears Roebuck in respect of sales
of Shares in any Quarter will be equal to the weighted average purchase price
paid by Sears Canada to shareholders pursuant to its Normal Course Issuer Bid
in the relevant Quarter.
Sears Canada will report to its shareholders in its quarterly and annual
reports as to the status of the Normal Course Issuer Bid.
All purchases of Shares pursuant to its Normal Course Issuer Bid will be
made by Sears Canada in accordance with the rules of the TSX. Moreover, Sears
Canada will make no purchases of Shares other than open market purchases,
except for purchases from Sears Roebuck, as outlined above. Any Shares
purchased will be cancelled.
The total purchases of Shares by Sears Canada pursuant to its Normal
Course Issuer Bid and pursuant to the arrangement with Sears Roebuck described
above will not exceed, in the aggregate, 5% of all outstanding Shares.
No director or senior officer of Sears Canada, and, to the knowledge of
the directors and senior officers of Sears Canada, no associate of a director
or senior officer of Sears Canada currently intends to sell Shares of Sears
Canada during the one-year period of its Normal Course Issuer Bid. Within the
12 months preceding the date of this press release, no Shares have been
purchased by Sears Canada. To the knowledge of Sears Canada, the only persons
holding 10% or more of the Shares of Sears Canada are Sears, Roebuck
(approximately 54%) and Mackenzie Financial Corporation (approximately 12.4%).
For further information: Vincent Power, Director, Corporate
Communications, Sears Canada Inc., Tel.: (416) 941-4422