Imasco Limited

Ruling

Headnote

Subsection 59(1) of Schedule 1 to the Regulation - Reduction of fee payable pursuantto subsection 32(4) of the Schedule in connection with going private transaction wheresuccessor business will immediately tender securities indirectly acquired under thegoing private transaction to a third party pursuant to a take-over bid - Fee is partiallyduplicative since going private transaction and take-over bid are inter-conditional.

Regulations Cited

Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., Schedule1 ss. 32(1), 32(4) and 59(1).


IN THE MATTER OF REGULATION 1015,
R.R.O. 1990, AS AMENDED (the "Regulation"),
MADE UNDER THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED

AND

IN THE MATTER OF
IMASCO LIMITED

RULING
(Subsection 59(1) of Schedule 1)


UPON the application of Imasco Limited ("Imasco") to the Ontario SecuritiesCommission (the "Commission") for a ruling, pursuant to subsection 59(1) of Schedule 1(the "Schedule") to the Regulation, exempting Imasco from payment of the fee calculatedpursuant to section 32(4) of the Schedule;

AND UPON considering the Application and the recommendation of the staff of theCommission;

AND UPON Imasco having represented to the Commission as follows:

1. Imasco was incorporated pursuant to the laws of Canada in 1912 and wascontinued under the Canada Business Corporations Act (the "CBCA") in 1976.Imasco's registered and principal office is in Montreal, Quebec. Imasco is areporting issuer or has equivalent status in each of the provinces of Canada andits common shares are listed on The Toronto Stock Exchange.

2. The authorized capital of Imasco consists of 482,000,000 common shares (the"Imasco Shares"), an unlimited number of first preference shares and an unlimitednumber of second preference shares. As at December 14, 1999, 433,000,833Imasco Shares were issued and outstanding.

3. British American Tobacco p.l.c. ("BAT"), a U.K. public company, owns indirectly184,174,155 (approximately 42.54%) of the outstanding Imasco Shares.Approximately 37% of the outstanding Imasco Shares are held by holders inOntario.

4. Imasco owns indirectly 117,174,584 (approximately 98.2%) of the outstandingcommon shares (the "CTFS Shares") of CT Financial Services Inc. ("CTFS") whichshares are registered on the books of CTFS with an address in Québec.

5. British American Tobacco (Canada) Limited ("BAT Canada") is a corporationincorporated under the laws of Canada with its registered office in Montreal,Quebec. BAT Canada is an indirect wholly-owned subsidiary of BAT.

6. Imasco, BAT and BAT Canada have entered into a Transaction ProposalAgreement, as amended and restated as of August 2, 1999 under which BATCanada is seeking to acquire all of the outstanding Imasco Shares, other than theImasco Shares currently held by BAT (the "Going Private Transaction"). The GoingPrivate Transaction will take the form of a capital reorganization which will allowImasco's public shareholders to vote on the acceptability of the Going PrivateTransaction.

7. Under a separate agreement between BAT and The Toronto-Dominion Bank ("TD"),TD will offer to acquire all of the outstanding CTFS Shares at a price of $67 pershare (the "CTFS Sale") by way of a formal take-over bid (the "CTFS Offer"). BAThas agreed to cause BAT Canada to enter into an agreement to deposit the117,174,584 CTFS Shares indirectly held by Imasco to the CTFS Offer.

8. An Imasco shareholders' meeting to consider the Going Private Transaction isscheduled to be held on January 28, 2000. Imasco has mailed its informationcircular in connection with the Going Private Transaction to holders of ImascoShares.

9. The Going Private Transaction and the CTFS Sale are inter-conditional with eachother such that neither will close without the other closing on the same day.

10. Under subsection 32(4) of the Schedule, Imasco would be required to pay a fee tothe Commission in respect of the Going Private Transaction on the basis of the totalconsideration to be paid to holders of Imasco Shares (other than BAT) by BATCanada.

11. Under subsection 32(1) of the Schedule, TD will be obligated to pay a filing fee tothe Commission in respect of the CTFS Shares purchased by TD under the CTFSOffer from shareholders whose last address as shown on the books of CTFS is inOntario.

12. If Imasco pays the full fee amount calculated in accordance with subsection 32(4),the Commission would be receiving fees in respect of the CTFS Shares held byImasco which are indirectly acquired by BAT and then, on the same day as suchacquisition, sold to TD pursuant to the CTFS Offer.

AND UPON the Commission being satisfied that to do so would not be prejudicialto the public interest;

IT IS RULED, pursuant to subsection 59(1) of the Schedule, for the purpose ofcalculating the fee payable by Imasco in respect of the Going Private Transaction, thevalue of the consideration receivable by holders for each Imasco Share in accordance withsubsection 32(4) of the Schedule shall be reduced by an amount equal to 37% of theproceeds to be received by Imasco from the sale of its CTFS Shares pursuant to the CTFSSale divided by the number of Imasco Shares acquired by BAT in the Going PrivateTransaction.

January 4th, 2000.

"J. A. Geller"      "Howard I. Wetston"