In July, we published a blog post on the Canadian M&A landscape in the first half of 2013. As 2013 has now come to an end, it seems appropriate to recap what happened in the second half of 2013. McCarthy Tétrault advised on seven of Lexpert’s top ten deals of 2013, published in the January issue of Lexpert. Below, we’ve highlighted some of the major trends and deals that transpired during Q3 and Q4 of 2013.
Second Half Sees Fewer but Larger Deals
Canadian companies were involved in 2,325 announced deals valued at $158.2 billion in 2013, down … Continue Reading
The authors of a recent US article appearing in Corporate Counsel explored how efforts clauses – that is, contractual provisions that require one party to a contract to exercise some standard of effort to maximize the benefits to be received by the other party to the contract – may be improved. Their hypothesis is simple: parties often expend far too much time negotiating over the adjectives “reasonable” or “best” and far too little time drafting benchmarks into the agreement as an objective measure of how efforts are to be applied. Their conclusion is that open-ended benchmarking assists in ensuring parties … Continue Reading
As we move into the second half of 2013, it seems appropriate to look back at what has gone on so far this year across the Canadian M&A landscape. Below we’ve highlighted some of the major news items and deals that have taken place so far.
First Half Sees Fewer and Smaller Deals. The first quarter of 2013 ended with the fewest number of Canadian M&A transactions in a particular quarter since Q1 2011. By value, it was the quietest quarter in three years. A first quarter Mergermarket report found an 11.4% reduction in deal volume (124 announced transactions) and … Continue Reading
In our recent series on corporate-spin off transactions, we focused on why a company should consider a spin-off, and how the spin-off could be implemented. In this post, we briefly outline some of the common risks that a company should be aware of before pursuing the spin-off.
Even for seasoned practitioners, a great deal of planning is required to effectively “spin-out” a part of an existing business and the road to completion is rife with challenges and legal complexities. First and foremost, a failure to adequately address the division of assets and liabilities as between the Parent and Spinco could … Continue Reading
In our last post, we outlined some of the reasons why corporate spin-offs are used. In this post, we address some of the most common methods used to implement the corporate spin-off.
How do I implement it?
In some cases, a Canadian public corporation seeking to distribute shares of Spinco to its shareholders will be able to do so by a reorganization known as a “butterfly transaction”. The advantage of a butterfly transaction is the deferral of Canadian income tax both at the corporate and shareholder level. The tax rules governing butterflies are highly complex and various restrictions, including … Continue Reading
On March 6, 2013, Time Warner Inc. issued a press release announcing plans to implement, courtesy of a spin-off transaction, a “complete legal and structural separation of Time Inc. from Time Warner.”
The proposed spin-off highlights an increasing trend among public companies in the face of tough market conditions – the transformation of what are usually large corporations not by building up their assets, but by efficiently siphoning them out. Time Warner would know, too – in the past decade, the company has used the vehicle of the spin-off to divest several of its major divisions, including the spin-off of … Continue Reading
Shareholders typically have three options available to them when looking to nominate directors different than those put forth by the company’s management, (i) a shareholder proposal that is added to the management proxy circular for the applicable shareholder meeting, (ii) the more popular and publicized proxy contest, which generally requires that the shareholder(s) soliciting proxies prepare and mail to shareholders a dissident proxy circular that both identifies the nominees in question and contains certain prescribed disclosure, and (iii) nominating directors from the floor at the company’s annual general meeting (either as a registered shareholder(s) or by way of proxies), usually … Continue Reading