In preliminary analyses of the companies in the S&P/TSX Composite Index prepared for the third quarter index review, it appeared to the S&P/TSX Composite Index Committee that a control block would reduce the market capitalization of Aeterna Laboratories below the minimum required under the index rules for continued membership in the Index. In a court agreement entered into between Standard & Poor's and Aeterna Laboratories on September 13th, and on the advice of legal counsel, Standard & Poor's agreed to review the control block question in light of additional information provided by Aeterna Laboratories and Aeterna Laboratories agreed to publicly disclose the information.
Based on a review of that additional information which was issued in a press release by Aeterna Laboratories on September 20th and based on the advice of legal counsel, the S&P/TSX Composite Index Committee has determined that the data does not support the existence of a control block under the current index rules, therefore the control block will be removed. Aeterna Laboratories will remain in the S&P/TSX Composite Index in connection with the September quarterly rebalancing and will be eligible to remain in the index as long as it continues to meet all requirements for inclusion. Shares of Aeterna will be adjusted to reflect the removal of the control block.
David M. Blitzer, Chairman of the S&P/TSX Canada Index Committee, commented, "The S&P/TSX Composite Index was designed as a rules based index because the market wanted a high degree of certainty about index membership and index changes. We believe we have taken the appropriate steps in this case and we remain committed to demonstrating independence and objectivity when identifying companies for inclusion." He added, "We will be conducting a review of the index rules and may implement certain changes to provide further clarity for all concerned."
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