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Tag Archives: Shareholder Activism

Corporate Democracy vs. Directors’ Powers: lessons from Marquee/Smoothwater

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

Alberta’s Court of Appeal recently overturned a controversial interlocutory decision involving a proposed acquisition by Alberta Oil Sands Inc. (“AOS”) of Marquee Energy Ltd. (“Marquee”) pursuant to a plan of arrangement under s. 193 of Alberta’s Business Corporations Act (“ABCA”). Even though only Marquee was being arranged, thus necessitating a vote by its shareholders, the underlying decision of the Court of Queen’s Bench required that AOS also seek the approval of its shareholders to implement the transaction. The Court of Appeal set aside the lower Court’s order requiring AOS shareholders to vote on the … Continue Reading

“Placeholder candidates”: an untested response to advance notice provisions

Posted in Canadian Market Entry, Public M&A, Shareholders, Strategy

Many US and Canadian public companies have implemented so-called advance notice provisions (“ANPs”), bylaws and policies requiring shareholders to provide a company with notice by a specified deadline should they wish to propose an alternative slate of directors at a shareholder meeting. Recently, a shareholder of a US company listed on the New York Stock Exchange ran out of time to provide the usual form of notice and instead nominated “placeholder candidates”. This article examines the novel and previously untested tactic of nominating “placeholder candidates” in proxy contests.… Continue Reading

Canada’s early warning rules get tougher in May

Canadian Securities Administrators adopt enhanced disclosure, retain 10% reporting threshold

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

Along with the announcement on February 25, 2016 of final amendments to Canada’s take-over bid regime (see our February 26, 2016 publication, Canada’s New Take-Over Bid Rules Seek to Level the Playing Field, relating to that announcement), the Canadian Securities Administrators (CSA) published the text of final amendments to Canada’s Early Warning Regime (EWR), which will take effect on May 9, 2016.1


The release of the amendments (EWR Amendments) brings to an end a three-year engagement by the CSA with market participants that began in March 2013 with an initial set of EWR proposals (see our March … Continue Reading

Harnessing Social Media for Crisis Management: Lessons following recent events involving short seller allegations

Posted in Canadian Market Entry, Public M&A, Shareholders, Strategy

In October, 2015, short-sellers attacked three Canadian public companies: Valeant Pharmaceuticals International, Inc., DH Corporation and Nobilis Health Corp. All three companies refuted the short sellers’ allegations in traditional media. We suggest below that these companies could have also used social media to get their side of the story out. In our view, there was a potential opportunity to further influence market sentiment about allegations that had already negatively impacted secondary market trading.[1]Continue Reading

Universal Proxies Coming to Canada? The CCGG Makes Its Case

Posted in Public M&A, Shareholders

In a recent policy statement, the Canadian Coalition for Good Governance (“CCGG”) endorsed the use of “universal proxies” whenever there is a contested director election at a Canadian public company. A “universal proxy” is a proxy voting form which lists all nominees for election regardless of who nominated them (whether management or dissident shareholder). Although there is nothing under corporate or securities laws which prohibits a company or a dissident from using a universal proxy,[1] it is common practice for Canadian issuers and dissident shareholders to solicit votes with the use of proxies which only list their … Continue Reading

Harnessing Social Media: Syngenta’s high-profile use in Monsanto bid

Posted in Canadian Market Entry, Public M&A, Shareholders, Strategy

In our two recent articles, available here and here, we outlined how social media can influence proxy contests and identified some potential legal challenges with this development. This update focuses on the recent use of social media in the high-profile (failed) hostile bid for Syngenta AG (“Syngenta”) by Monsanto Company (“Monsanto”).


In May 2015, Monsanto made a $45 billion bid (its third bid in four years) for Syngenta. Syngenta’s board almost immediately rejected the offer on the grounds of anti-trust concerns and lack of protection for shareholders should the deal fall apart. The rejection … Continue Reading

The 2015 Proxy Season: Glass Lewis and ISS Canadian Proxy Voting Guidelines Updates

Posted in Public M&A, Shareholders, Strategy

With the 2015 Proxy Season close at hand, Glass, Lewis & Co., LLC (Glass Lewis) and Institutional Shareholder Services Inc. (ISS) recently released their updated Canadian proxy voting guidelines. Changes and clarifications have been made to their guidelines in such areas as advance notice policies and by-laws, shareholder rights plans and majority voting.… Continue Reading

Mini-Tenders 301: Will Such Offers Be Used in Proxy Contests?

Posted in Public M&A, Shareholders, Strategy

This is the final article in our mini-tender trilogy. We have previously discussed mini-tender offers from the perspectives of the offeror, and the issuer and shareholders. This article considers how mini-tenders might be strategically used in proxy contests.

As shareholder activism rises, the activists’ toolkit keeps evolving. The strategic use of a mini-tender offer in a recent proxy contest suggests that such offers may increasingly be considered as a means of influencing the outcome of proxy contests.… Continue Reading

Mini-Tenders 201: Responding to Mini-Tender Offers

Posted in Public M&A, Shareholders, Strategy

In our previous article, we introduced mini-tenders and discussed the factors that should be considered before launching a mini-tender offer. As a refresher, a mini-tender is an offer to purchase securities below the threshold that triggers regulatory rules for take-over bids. Such an offer is not specifically regulated and can be used to acquire small but not insignificant positions in public companies, often at a discount to the prevailing market price.

In this article, we discuss mini-tenders from the perspective of issuers and shareholders.

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Mini-Tenders 101: Factors to Consider Before Launching a Mini-Tender Offer

Posted in Public M&A, Shareholders, Strategy

Mini-tenders have a bad reputation, which may explain why they are used infrequently. This is the first in a trilogy of articles about mini-tender offers from the perspectives of offerors, issuers and shareholders. It reviews factors that an offeror should consider before launching a mini-tender offer.

A mini-tender is simply an offer to purchase securities below the threshold that triggers regulatory rules for take-over bids. Such an offer is not specifically regulated and can be used to acquire small but not insignificant positions in public companies, often at a discount to the prevailing market price.

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Shareholder activism goes mainstream – After the Pershing Square Holdings IPO, shareholder activism should be on every corporation’s radar

Posted in Shareholders

Shareholder activists are increasingly influential in Canada’s M&A landscape, but expect that trend to intensify with a proposal to list Pershing Square Holdings on the Euronext Amsterdam stock exchange. The listing is expected to complete Bill Ackman’s capitalization of the new $5 billion fund associated with Pershing Square Capital Management. The listing, which is likely to be complete by mid-October, will provide Mr. Ackman with the stable pool of capital he has long believed his investment strategy would benefit from.

In his 2014 Q2 letter to investors, Mr. Ackman expressed frustration that the Pershing Square group of funds must keep … Continue Reading


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 to a third party, GRIT, in a financing transaction that closed in escrow on the same date as the revised record date for the meeting. Oremex took the view that the new shares could be voted at the contested meeting.

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Don’t be a “Dummy Director”

Delaware ruling on the obligations of directors of companies operating in emerging markets

Posted in Public M&A, Shareholders, Strategy





“Independent directors who step into these situations involving essentially the fiduciary oversight of assets in other parts of the world have a duty not to be dummy directors.” p. 21 of transcript, In re Puda Coal Stockholders Litigation, Del. Ch. C.A. 6476-CS (February 6, 2013).

A recent Delaware bench ruling considers some of the issues highlighted by fraud allegations against emerging market issuers like Sino-Forest Corporation and Zungui Haixi Corporation, and the Ontario Securities Commission’s recently issued Staff Notice 51-720 – Issuer Guide for Companies Operating in Emerging Markets.

In re Puda, shareholders … Continue Reading

Proposed Changes to Early Warning Reporting System Address Market Transparency and Shareholder Activism in Canada

Posted in Public M&A, Shareholders, Strategy

Under Canada’s early warning reporting (EWR) system, investors holding 10% or more of a public company’s voting securities must publicly report their ownership levels, the purpose of the transaction and any future intention to accumulate more securities. Eligible institutional investors can report more slowly than EWR filers and provide less information by making use of the alternative monthly reporting system (AMR).

Proposals just published by Canadian securities administrators would lower the reporting threshold, thereby increasing the transparency to the market of significant investments. The proposals would also increase EWR disclosure obligations for investors who acquire derivatives or public company securities … Continue Reading