Latest updates

105-day takeover bids – what impact on takeover defences?
  • Canada
  • 09 March 2016

The Canadian Securities Administrators recently published a harmonised takeover bid regime for non-exempt takeover bids and amendments to early warning reporting requirements. The new takeover bid regime is substantially the same as the original 2015 proposal except that the minimum deposit period has been set at 105 days (as opposed to the current 35 days and the 120 days in the 2015 proposal).

60-day bid, 120-day pill, 90-day decision: a sign of further change to come?
  • Canada
  • 16 December 2015

In Suncor's hostile bid for Canadian Oil Sands the target adopted a poison pill that required a 120-day deposit period consistent with the required deposit period in the proposed new takeover bid regime. When Suncor challenged this, the Alberta Securities Commission held that it would leave the pill in place for now and cease trade the pill after a total of 90 days. Was this the right decision, and is this a sign of further changes to the proposed new takeover bid regime?

Canadian securities regulators publish crowdfunding exemption
  • Canada
  • 02 December 2015

The securities regulatory authorities in Manitoba, Ontario, Quebec, New Brunswick and Nova Scotia recently published, in final form, Multilateral Instrument 45-108 – Crowdfunding. The instrument includes a crowdfunding prospectus exemption and a registration framework for funding portals to allow start-up and early-stage companies to raise capital.

Cybersecurity in M&A transactions
  • Canada
  • 22 July 2015

Companies engaged in mergers and acquisitions must ensure from the outset that their communications are taking place in a cybersecure environment. Online data rooms are rich targets for cybercriminals. The flow of information between buyers, targets and their consultants is particularly tempting, so a secure online data room is essential – but may not be enough.

Poison pills are dead – or are they?
  • Canada
  • 22 April 2015

The Canadian Securities Administrators recently announced a proposed harmonised takeover bid regime for non-exempt takeover bids based on three principles, including a 50% minimum tender condition and longer deposit periods. But with these proposals, have Canadian securities regulators effectively eliminated the need for the traditional poison pill defensive tactic?

Pre-merger review threshold increased
  • Canada
  • 01 April 2015

Industry Canada has recently announced that the threshold for pre-merger reviews for direct investments involving Canadian (non-cultural) businesses by World Trade Organisation (WTO) members will increase in 2015. The existing threshold for transactions that relate to cultural businesses or where none of the parties is from a country that is a WTO member will continue to apply.

CRA curbs GST/HST reporting by joint venture bare trustees and nominee corporations
  • Canada
  • 25 February 2015

The Canada Revenue Agency (CRA) has amended its policy so that bare trustees or nominee corporations of a joint venture can no longer account for goods and services tax and harmonised sales tax collection and related input tax credit claims on the joint venture's behalf. As a result, participants in joint ventures should give careful consideration to whether their structure remains compliant with CRA policy.

CSA finds antidote for poison pill debate
  • Canada
  • 01 October 2014

The Canadian Securities Administrators has resolved its competing views on the regulation of security holders rights plans ('poison pills') and has announced a proposed harmonised framework. The proposed framework is intended to address the CSA's concern that the Canadian takeover bid regime has become too "bidder friendly".

Terminating a rights plan: the issue is when, not if
  • Canada
  • 30 July 2014

The British Columbia Securities Commission recently defended the unusually long shelf life that it accorded to a poison pill in the face of a hostile takeover bid by releasing of reasons supporting its decision to allow Augusta Resource Corporation to leave its shareholder rights plan in place in the face of the HudBay Minerals Inc hostile bid for a total of 156 days.

BCSC upholds Augusta rights plan for an additional 75 days
  • Canada
  • 21 May 2014

The British Columbia Securities Commission has issued an order allowing Augusta Resource Corporation to leave its shareholder rights plan in place until July 15 2014 in the face of HudBay Minerals Inc's hostile bid. This order will be welcomed in circles where concerns have been expressed that takeover bid regulation in Canada has unduly favoured hostile bidders and contributed to the 'hollowing out' of corporate Canada.

No mere rubber stamp: admissibility of fairness opinion in arrangement transaction
  • Canada
  • 14 May 2014

A recent decision of the Ontario Superior Court of Justice (Commercial List) brought to the fore the role of fairness opinions in solvent arrangement transactions. The court approved the arrangement, but deemed the fairness opinion to be inadmissible on the basis that it failed to disclose the reasons underlying its conclusion. The case represents a small but important shift in the judicial approach to fairness opinions.

CSA proposes new crowdfunding exemption
  • Canada
  • 07 May 2014

The securities regulators in Ontario, Quebec, Manitoba, New Brunswick and Nova Scotia have proposed a new prospectus exemption for crowdfunding. At present, crowdfunding is most often used as a source of funding for charities, without the issuance of securities. However, the regulators consider it to be a viable alternative for start-ups and small and medium-sized enterprises to raise capital through the issuance of securities.

Quebec: a safe haven for boards under siege?
  • Canada
  • 12 March 2014

Concerned with the hollowing out of Quebec Inc, the Parti Québécois minority government came out strongly in favour of the right of a board of directors to 'just say no' to hostile takeovers. Under a proposal contained in its recent 2014-2015 budget, Quebec corporations could implement novel defensive tactics.

BCSC releases reasons in Aurizon rights plan decision
  • Canada
  • 23 October 2013

The British Columbia Securities Commission has released reasons supporting its recent decision to grant Alamos Gold Inc's request to cease trade a shareholder rights plan implemented by Aurizon Mines Ltd in the face of Alamos's hostile bid for Aurizon, while rejecting Alamos's request to cease trade the rival white-knight bid for Aurizon from Hecla Mining Corporation.

Share valuation basics
  • Canada
  • 16 October 2013

A need to determine the value of shares in a corporation can arise in several ways. In many situations the buyer and seller can agree on the value of the shares. But what if they are unable to do so? In situations where the sale is compulsory, litigation or arbitration will be required to determine share value. That will almost certainly require expert opinion evidence.

CSA proposes significant changes to M&A regulation
  • Canada
  • 22 May 2013

The Canadian Securities Administrators has proposed a new rule governing shareholder rights plans – or 'poison pills' – that would provide target boards with the ability to delay a takeover bid unilaterally for a minimum of 90 days. If implemented, the proposed rule would likely make the process of completing a hostile bid in Canada more expensive and subject to considerably more uncertainty from the bidder's point of view.

Termination rights in bought deal bid letters: Stetson Oil
  • Canada
  • 15 May 2013

In its recent decision in Stetson Oil & Gas Ltd v Stifel Nicolaus Canada Inc the Ontario Superior Court of Justice ruled that Stifel had breached its obligation to Stetson to purchase C$25 million of Stetson's subscription receipts pursuant to a 'bought deal' financing and ordered Stifel to pay Stetson approximately C$16 million in damages for the failed private placement.

CSA proposes expanded early warning reporting
  • Canada
  • 01 May 2013

In a move that could limit the options of potential acquirers and activist investors, while significantly increasing the paper burden for institutional investors and mutual funds, the Canadian Securities Administrators has proposed a significant expansion to the early warning obligations for investors in securities. The regulator aims to provide greater transparency and address concerns regarding hidden ownership and empty voting.

Drafting go-shop clauses in M&A transactions
  • Canada
  • 03 April 2013

While still used sparingly, there has been a slight increase in the use of 'go-shop' clauses by Canadian targets in friendly acquisitions over the past few years. Given the potential benefits and limitations of go-shops, it is critical that targets and their advisers carefully negotiate and draft go-shops to maximise effectiveness.

The impact of pension deficits on M&A
  • Canada
  • 27 March 2013

Deficits in defined benefit pension plans will continue to be an issue in 2013. Purchasers and lenders must carefully review the financial position of the target's pension plans, and the target's current and future legal obligations under those plans, and determine the impact of those obligations on the value of the enterprise.