The much-discussed amendments to Canada's takeover bid
regime (the "Takeover Amendments"), as
well as concurrent amendments to Canada's early warning regime
(the "Early Warning Amendments"), came
into force today (May 9, 2016).
The Takeover Amendments
As noted in our February 25, 2016 Update, Amendments to
Takeover Bid Rules Alter Canada's M&A Landscape, the
main elements of the Takeover Amendments are:
Minimum Tender Condition.
The Takeover Amendments require that all non-exempt takeover bids
meet a minimum tender requirement of more than 50% of the
outstanding securities that are subject to the bid and held by
disinterested securityholders. This requirement applies equally to
partial bids, making them more challenging for bidders.
Minimum Bid Period. The
Takeover Amendments require a minimum deposit period of 105 days.
Shorter minimum periods are permitted, to as low as 35 days, at the
target board's discretion or if the target enters into an
alternative transaction, such as a plan of arrangement.
Mandatory Extension. The
minimum deposit period must be extended by a minimum of 10 days
after the minimum tender requirement and all other conditions are
As discussed in greater detail in our March 1, 2016 Article,
Takeovers Get a Makeover - A Guide to the New Takeover
Bid Regime in Canada, the Takeover Amendments are expected to
have a significant impact on the M&A landscape in Canada. In
particular, as we note in our May 9, 2016 Article, The Role of
Private Placements in Canada's New Take-over Bid Regime,
while the effectiveness of some defensive tactics, such as the
traditional poison pill, may be circumscribed, other defensive
tactics, such as private placements into friendly hands, could
become more prevalent.
The Early Warning Amendments
As noted in our February 26, 2016 Update, CSA Adopt
Amendments to the Early Warning Regime, the Early Warning
require disclosure where ownership,
control or direction of a person required to report under the
regime decreases by 2% or falls below the 10% reporting
preclude institutional investors who
solicit proxies from securityholders in some circumstances from
relying on the alternative monthly reporting system;
do not require disclosure by lenders
of shares pursuant to a specified securities lending arrangement or
by borrowers of shares, in certain circumstances, under a
securities lending arrangement;
provide guidance regarding the
circumstances in which an investor may be required to include
certain derivatives in the early warning threshold calculation;
enhance disclosure by (i) requiring
more detailed information regarding the intentions of the acquiror
and the purpose of the transaction in early warning reports, (ii)
requiring the early warning report to be certified and signed,
(iii) permitting a news release filed in connection with an early
warning report to reference that report for certain details, and
(iv) clarifying that early warning news releases must be issued and
filed no later than the opening of trading on the next business
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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