On September 11, 2014, the Canadian Securities Administrators
proposed a new, harmonized approach to the take-over bid rules in
force throughout Canada (the "Concept Proposal").
The Concept Proposal seeks to facilitate informed, co-ordinated
and voluntary tendering to a take-over bid by a target
company's shareholders and to provide its board of directors
with additional time to respond to a hostile bid. These proposed
reforms are expected to address a perceived power imbalance in the
existing take-over bid rules that is said to favour hostile bidders
over the boards of directors of target companies.
The key features of the Concept Proposal are:
Additional time to select a better or competing offer
Minimum bid period of 120
days: a take-over bid would be required to remain
open for a minimum of 120 days, although the target company's
board would have the ability to reduce this period to 35 days
(which reduction would apply to all bidders in a competitive
scenario). The minimum bid period is 35 days under the existing
take-over bid rules.
Reduction in ability to launch coercive bids
Minimum tender condition
in excess of 50%: for a bidder to take-up any
securities under a bid, more than 50% of all outstanding securities
of a class held by non-bidding parties would need to be tendered.
There is no minimum tender condition under the existing take-over
10-day bid period
extension: upon meeting the minimum tender condition
and announcing its intention to take-up and pay for the tendered
securities, a bidder would be required to extend its bid for a
period of 10 days. Under the existing take-over bid rules, a bidder
is not required to extend its bid upon announcing it will take-up
and pay for securities.
In March of 2013, the CSA proposed reforms to the regulation of
shareholder rights plans in Canada. Concurrently (and despite
contributing to the CSA proposal), Québec's securities
regulator, the Authorité des Marchés Financiers,
released a white paper in which it recommended broader reforms to
take-over bid regulation (and, in particular, a board of
directors' discretion to reject a hostile bid). The Concept
Proposal replaces these previous proposals in favour of a
harmonized set of reforms to Canada's take-over bid laws.
The CSA intends to publish its draft rules for comment in the
first quarter of 2015.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).