On February 25, 2016, the Canadian Securities Administrators
("CSA") announced amendments to take-over bid rules in
Canada. The changes, as reflected in National Instrument 62-104
Take-Over Bids and Issuer Bids (NI 62-104) and National Policy
62-203 Take-Over Bids and Issuer Bids, are intended to enhance the
quality and integrity of the take-over bid regime while rebalancing
the dynamics among bidders, target company boards of directors and
target company shareholders during a take-over bid.
In a fundamental change, the new take-over bid rules will
require that all non-exempt take-over bids must meet a minimum
tender requirement of more than 50 per cent of the outstanding
securities that are subject to the bid (excluding securities owned
by the bidder itself or its joint actors). The current rules do not
have any minimum tender requirements.
The new rules also require a minimum deposit period of 105 days
(up from the current 35 days), subject to exceptions that allow for
a shorter minimum period, either at the discretion of the target
board, or in the event that the issuer enters into a specified
alternative transaction. Further, the minimum deposit period will
be subject to an extension period of a minimum of 10 days after the
minimum tender requirement and all other conditions are met;
currently, there is no extension requirement.
"The new regime will enhance the ability of the security
holders to make voluntary, informed and coordinated tender
decisions while providing boards with additional time and
discretion when responding to a take-over bid," said Louis
Morisset, Chair of the CSA and President and CEO of the
Autorité des marchés financiers.
The Amendments will come into force on May 9, 2016 (Ontario may
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