WSP Global : Bought Deal Launched By The Concurrent Filing Of Base Shelf And Prospectus Supplement

Stikeman Elliott has acted on behalf of WSP Global Inc. (WSP) in connection with a novel $502 million bought deal offering that closed on June 17, 2020 where WSP concurrently filed a new preliminary base shelf prospectus (Preliminary Shelf) and preliminary (draft) prospectus supplement (Preliminary Supplement) to qualify the shares under the bought deal offering.

On June 1, 2020, WSP announced that it had entered into a bought deal agreement in connection with a bought deal offering of common shares to be qualified by way of a prospectus supplement to a base shelf prospectus filed in all provinces and territories of Canada. Setting this offering apart from other bought deals was the concurrent filing of a Preliminary Shelf and Preliminary Supplement after the execution of the bought deal agreement. Typically, issuers looking to undertake a bought deal would either file a short form prospectus or a prospectus supplement to a base shelf prospectus already approved and receipted by the applicable securities commissions.

Issuers filing a base shelf prospectus for common shares or convertible instruments are usually concerned that it will create a market expectation that an equity raise is imminent, which may impose negative pressure on the issuers' share price. This novel prospectus structure allows for the first offering under the base shelf prospectus to be launched immediately prior to the filing of the Preliminary Shelf, largely mitigating this concern.

While typically a prospectus supplement would not be subject to regulatory review, both WSP's Preliminary Shelf and Preliminary Supplement were subject to comment by the securities regulators, with a final receipt being issued (or deemed issued) in each of the provinces and territories of Canada only for the final base shelf prospectus. The standard four day bought deal launch timeline was truncated to two days, in compliance with the shelf rules found in National Instrument 44-102 Shelf Distributions (NI 44-102).

Going forward, issuers looking to mitigate overhang risk may want to consider this novel type of concurrent filing, to launch a bought deal under a new base shelf prospectus and take advantage of the efficiency of preparing what is effectively one prospectus under NI 44-102 while retaining maximum financing flexibility going forward with the base shelf prospectus continuing to be in place for a period of 25 months following the offering.

Originally published June 17, 2020.

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