Canadian M&A Perspectives Private and Public Mergers & Acquisitions | Private Equity

Category Archives: Strategy

Subscribe to Strategy RSS Feed

Bitcoin Accepted Here? Funding M&A Transactions by Way of Bitcoin

Posted in Private Equity, Private Transactions, Strategy

There is no denying the increasing popularity and notoriety of the virtual currency Bitcoin.  Bitcoin market capitalization currently stands in the billions of dollars, with over 13 million Bitcoins having been mined and made available for circulation.  An increasing number of merchants, including Dell, have begun accepting payment by way of Bitcoin.  The list of… → Read More

Proposed Changes to Takeover Bid Regime in Canada Would Put More Time in the Hands of Target Boards

Posted in Public M&A, Shareholders, Strategy

On September 11, 2014, the Canadian Securities Administrators (CSA) published CSA Notice 62-306 – Update on Proposed National Instrument 62-105 Security Holder Rights Plans (Notice) and the Autorité des marchés financiers (AMF) Consultation Paper An Alternative Approach to Securities Regulators’ Intervention in Defensive Tactics. The notice indicates that the CSA intend to publish for comment a… → Read More

GOOD FAITH BARGAINING? Recent Decision Implies a Duty to Negotiate in Good Faith

Posted in Contractual Matters, Private Equity, Private Transactions, Strategy

A duty to negotiate in good faith appears to run counter to the adversarial nature of bargaining. However, parties may have a duty to negotiate in good faith according to the recent decision in SCM Insurance Services Inc. v. Medisys Corporate Health LP, 2014 ONSC 2632, where the Ontario Superior Court held that the parties… → Read More

Reasonable Efforts vs. Best Efforts – Why the Fuss?

Posted in Contractual Matters, Strategy

Last fall, we featured a blog post that offered a Canadian perspective on the interpretation and use of benchmarking in efforts clauses. Some of the commentary that ensued suggests that Canadian courts were “doomed to incoherence” by distinguishing between best efforts and reasonable efforts.[i] Yet this distinction between efforts clauses has existed for some time… → Read More

More on “Golden Leash” Arrangements

Institutional investor organization urges SEC to require disclosure

Posted in Public M&A, Shareholders, Strategy

The debate about so-called “golden leash” arrangements has picked up again. The Council of Institutional Investors (“CII”), an influential association of institutional investors, recently wrote a letter to the U.S. Securities and Exchange Commission (“SEC”) expressing its concerns regarding the transparency of compensation paid in “golden leash” arrangements. As discussed in our previous post, “golden… → Read More

Augusta/HudBay – A model for target boards to say “not now”?

Posted in Public M&A, Shareholders, Strategy

The recent outcome of the Augusta/HudBay poison pill hearing provides some insight into how a shareholder rights plan may withstand scrutiny from a Canadian securities regulator for an extended period of time in the right circumstances. Though perhaps the result of somewhat unique facts, including insufficient initial support for the price being offered by the… → Read More

SHOTGUN! You should know this before triggering a buy-sell provision

Posted in Contractual Matters, Private Equity, Private Transactions, Shareholders, Strategy

There are important lessons in a recent Ontario Court of Appeal decision examining shotgun buy-sell provisions, and in particular, the enforceability of a buy-sell offer that does not perfectly comply with the terms and conditions of the shotgun provision. Unanimous shareholder agreements, partnership agreements, and joint venture agreements often contain what is commonly known as… → Read More

DEFENSIVE TACTICS DURING A PROXY CONTEST: lessons from the Oremex saga

Posted in Private Equity, Private Transactions, Shareholders, Strategy

There are important lessons in a recent Ontario Superior Court decision examining defensive tactics taken by a board in the context of a contested shareholders’ meeting. In Concept Capital Management Ltd. v. Oremex Silver Inc., 2013 ONSC 7820, the board of Oremex – during a contested election — postponed a shareholders’ meeting and issued shares… → Read More

By-laws counteracting “Golden Leash” arrangements: ISS speaks

Posted in Public M&A, Shareholders, Strategy

On January 13, 2014, Institutional Shareholder Services Inc. (“ISS”) issued FAQs explaining its views on by-laws designed to prohibit so-called “Golden Leash” arrangements. As discussed in our post last month, such arrangements arise when a shareholder activist privately offers to compensate its nominee directors in connection with such nominees’ service as a director of the… → Read More

New 2014 Investment Canada Act WTO Review Threshold

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

Industry Canada has announced that the Investment Canada Act (Act) threshold for 2014 that applies to most direct acquisitions of Canadian businesses by non-Canadian investors from World Trade Organization (WTO) member countries is $354 million (an increase from last year’s $344 million threshold). The threshold applies to the gross book value of the target’s assets…. → Read More

A Guide to Canadian M&A in the Second Half of 2013

Posted in Awards and Recognitions, Contractual Matters, Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

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… → Read More

“Golden Leashes”

The Controversy from this Proxy Season

Posted in Public M&A, Shareholders, Strategy

“Golden Leashes”, and by-laws designed to counteract such arrangements, have provoked significant controversy in the 2013 proxy season, and regulators, proxy advisors, and institutional shareholders have yet to take a definitive position in the debate. This post reviews what will certainly continue to be a hot button topic in 2014.

TSX Proposes to Loosen Shareholder Approval Requirements for New Security-Based Compensation Arrangements in M&A Transactions

Posted in Public M&A, Shareholders, Strategy

On November 28, 2013, the Toronto Stock Exchange published proposed amendments to the TSX Company Manual that would permit a listed issuer to adopt new security-based compensation arrangements for employees of a target company in the context of an M&A transaction without the need to obtain shareholder approval provided that certain conditions are met. The… → Read More

Should a Seller Care About Due Diligence?

Yes. And here are a few MORE reasons why.

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

In our recent post we considered, to what extent, the seller in the context of an M&A transaction should care about legal due diligence, and suggested that there are a number of important reasons why a seller should concern itself with legal due diligence in the face of an acquisition. In addition to our thoughts… → Read More

Should a Seller Care About Due Diligence?

Yes. And here’s a few reasons why.

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

Legal due diligence is typically a key part of an acquisition, but historically the focus has been on diligence from the perspective of the buyer, and less frequently from the perspective of the seller. Of course, this is natural given it’s the buyer who will want to uncover everything it can about the business it… → Read More

Are you meeting expectations? A Case for Benchmarking

A Canadian perspective on the interpretation and use of benchmarking in an efforts clause

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

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:… → Read More

A Guide to Canadian M&A in the First Half of 2013

Recovery Hits Roadblock: 2013 sees decline in Canadian and Global deal volume and value

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

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… → Read More

Deal or No Deal?

The importance of knowing when you have an agreement

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

When negotiating a deal, it is critical for parties to be aware of when they have reached an agreement. Recently, in Proton Energy Group SA v. Public Company Orlen Lietuva, [2013] EWHC 334 (Comm), the English High Court found in a preliminary motion that it was “plausible” that an email with the word “confirmed” was… → Read More

What’s so “Special” about a “Special Committee”?

The importance of context when evaluating the need to establish a special committee

Posted in Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

In a recent bench ruling in Re Plains Exploration, the Delaware Court held that a special committee was not required to take the lead in merger negotiations in circumstances where almost all of the members of the board were independent and free from conflict in connection with the transaction. In Re Plains Exploration, the Delaware… → Read More

Immigration Issues in M&A Transactions

Considerations for foreign-based companies sending employees to Canada.

Posted in Private Equity, Private Transactions, Public M&A, Strategy

Given the complexities of a typical business acquisition, it is frequently the case that immigration issues slip well down the priority list for such a transaction.  From dealing with entry into Canada for the purpose of conducting due diligence, to deciding whose responsibility it is to employ foreign workers post transaction, immigration issues should be… → Read More

You Can’t Always Get What You Want

Making realistic projections during an auction process

Posted in Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

The recent Delaware ruling in In Ancestry.com Inc. Shareholder Litigation provides a cautionary tale relating to a target company developing aggressive projections during an auction process. The Relevant Facts Following the announcement of a going-private transaction, some shareholders of Ancestry.com filed suit in the Delaware Court of Chancery alleging, among other things, that the board… → Read More

Challenges for State-Owned Enterprises Arising From Proposed Amendments to the Investment Canada Act

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

The Canadian government’s Bill C-60 contains proposed amendments to the Investment Canada Act that will significantly impact foreign investors whom the Canadian government considers as state-owned enterprises (SOEs).  An investor might be an SOE even if a foreign state only indirectly “influences” the investor.  Under these amendments, if the Minister of Industry determines that an… → Read More

Ignorance is not bliss: beware minimal due diligence

Lessons from the Quebec Court of Appeal

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

The Quebec Court of Appeal’s decision in Francoeur v. 4417186 Canada Inc., 2013 QCCA 191, provides a cautionary tale on the dangers of entering into a share purchase agreement and subsequently closing a share purchase transaction, without ample due diligence. The one-sided apportionment of risk The Francoeur share purchase agreement (the “SPA”), which was signed… → Read More

The Spin on Spin-Offs (Part 3)

A Valuable Tool to Unlock Shareholder Value

Posted in Public M&A, Shareholders, Strategy

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… → Read More