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Monthly Archives: June 2012

The Rising Trend of Reverse Break Fees

Posted in Contractual Matters, Private Transactions, Public M&A, Strategy

Break fees have for many years been a conventional deal protection feature of public M&A transactions. These fees, often referred to as termination fees as they are tied to the termination provisions in the contract containing the deal terms, are typically payable by a target company where it elects to end an agreement for an M&A deal with a prospective buyer (almost always in order to accept a higher offer from another suitor).  Such fees can promote deal certainty for a buyer by attaching adverse monetary consequences to a target terminating the deal.

Reverse break fees (as opposed to … Continue Reading

Personal Property Security Estoppel Letters: What Are These and Why Are They Needed?

Posted in Public M&A, Strategy

The concept of an “estoppel letter” (also sometimes referred to as an “acknowledgement”, “waiver” or a “collateral narrowing letter”) in respect of personal property security registrations can be quite puzzling to US clients, as it is a much more common practice to obtain these in Canada than in the United States. However, purchasers in an M&A transaction often rely on estoppel letters for comfort that they are purchasing a target company’s assets free of any liens.

What is an estoppel letter? An estoppel letter is an acknowledgment obtained from a prior secured party (identified through personal property security searches – … Continue Reading

5 Things US Activist Investors Need to Know about Canada

Posted in Public M&A, Shareholders, Strategy

With the recent election of seven nominees to the board of CP Rail, Bill Ackman and Pershing Square demonstrated in dramatic fashion that no Canadian company is immune from the rough-and-tumble world of proxy battles. Mason Capital also illustrated this recently with its successful opposition to the proposed share conversion of Telus Corp.  Shareholder activism is clearly alive and well in Canada.

In light of the number of US activist investors that continue to look at target companies north of the border, and as part of the series of blogs for US investors that was recently launched by my colleagues … Continue Reading