The Canadian Securities Administrators (CSA), including the
Autorité des marchés financiers (AMF), announced
yesterday that they will not be proceeding with defensive tactics
proposals published by the CSA and the AMF last year (see our March
15, 2013 update, Canadian Securities Regulators Propose New
Regimes for Shareholder Rights Plans) and instead have
determined to implement a new, harmonized regulatory proposal
involving amendments to the take-over bid regime.
The CSA's proposed amendments to the take-over bid regime
would impose the following requirements for all non-exempt
Mandatory Minimum Tender Condition. All bids would be
subject to a mandatory condition that more than 50% of all
outstanding target securities owned or held by persons other than
the bidder and its joint actors be tendered and not withdrawn
before the bidder can take up any securities under the bid.
Mandatory Deposit Period After Satisfaction of Minimum
Tender Condition. All bids would have to be extended for 10
days after the bidder achieves the mandatory minimum tender
condition and announces its intention to immediately take up and
pay for the securities deposited under the bid (to provide
non-tendering shareholders with an opportunity to tender once
it's clear that the bid is proceeding).
Minimum 120-Day Bid Period (Unless Abridged by the
Target). All bids would have to remain open for at least 120
days unless the target board agreed (in a non-discriminatory manner
when there are multiple bids) to a minimum period of at least 35
These changes would effectively impose, as a minimum statutory
standard for take-over bids in Canada, an enhanced form of the
"permitted bid" concept commonly included in shareholder
rights plans adopted by Canadian public companies.
The CSA has indicated that it is not contemplating any
amendments to the current take-over bid exemptions or National
Policy 62-202 Defensive Tactics. Consequently, we expect
shareholder rights plans would continue to serve to, among other
things, preclude "creeping" acquisitions by bidders
relying on existing take-over bid exemptions.
The CSA expect to publish the proposed amendments for comment in
the first quarter of 2015. We expect those comments may focus on,
among other things, how the 120-day minimum bid period will affect
the potential use of compulsory acquisition rights under Canadian
corporate statutes (some of which are dependent on the offeror
acquiring 90% of the shares that it and its affiliates did not own
before the bid within 120 days of the bid).
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific advice should be
sought about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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