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 bidder and an active process being conducted by the target company, the British Columbia Securities Commission’s decision in Augusta/HudBay is also of interest in the context of the ongoing debates sparked by the proposed National Instrument 62-105 on Security Holder Rights Plans.… Continue Reading
Acquisitions of public companies in Canada almost always take the form of either a take-over bid or court-approved plan of arrangement. Choosing between the two is highly dependent on the facts of each case. It’s not uncommon for bidders to start with one structure and then to flip over to the other as the deal evolves. I’ve set out below the top ten considerations for a bidder when it makes this important decision:
- Hostile/Friendly. If the offer is not supported by the target’s board, the bidder will almost always choose to proceed by way of take-over bid. Although there
After a few years on hiatus, the Ontario Securities Commission hosted its “Dialogue” conference once again on November 1, 2011. OSC Dialogue opened with a speech from the Chair of the Ontario Securities Commission, Howard Wetston, and filled the morning with two panel discussions, one on market infrastructure and another on strategic issues in investor protection.
The OSC Dialogue’s lunch hour was scheduled with a speech from The Honourable Dwight Duncan, Ontario’s Minister of Finance, as well as a speech from Ian Russell, President and CEO of the Investment Industry Association of Canada.
Of particular interest though for this blog … Continue Reading
The Ontario Securities Commission issued an order this week in connection with a shareholder rights plan adopted by the board of directors of MOSAID Technologies Incorporated in response to a hostile bid made by Wi-LAN Inc. The OSC ordered that effective November 1, 2011 (i.e. 70 days after the commencement of Wi-LAN’s unsolicited offer), MOSAID’s shareholder rights plan must go. The key factors considered by the OSC in arriving at its decision to allow the rights plan to stick around for another couple of weeks (not as long as MOSAID had wanted) included:
- MOSAID was continuing to run an auction
A poison pill, or shareholder rights plan, is a device implemented by a company’s board of directors in order to deter unsolicited or hostile acquisition proposals. The rights plan originated in the United States and was introduced in Canada in 1988 when Inco adopted its first rights plan. The introduction of poison pills in both countries was met with questions as to their legality. In the divergent approaches through which these questions were resolved in Canada and the United States (in particular Delaware), the rights plan and its effectiveness as a take-over defence have followed divergent paths.
In Delaware, the … Continue Reading