Originally published in Blakes Bulletin on Mergers & Acquisitions, October 2007
On October 12, 2007, the Toronto Stock Exchange (TSX) issued a request for comments on its security holder approval requirements relating to acquisitions of public companies.
While the TSX rules currently require that shareholders must approve the issuance of listed securities as consideration in an acquisition when the number of securities to be issued exceeds 25% of the outstanding securities of the listed company, this requirement does not apply when the entity being acquired is a reporting issuer (or equivalent status) having 50 or more beneficial security holders, excluding insiders and employees. The TSX does, however, have the general discretion to require shareholder approval of transactions materially affecting control of a listed company. The TSX is now considering whether security holder approval requirements for the acquisition of public companies through the issue of securities should be revised and in connection therewith has asked for the views of market participants on nine discrete questions.
In order to put the matter in context, the TSX’s request for comments includes some background to the current rule on security holder approval for acquisitions of public companies, a discussion of certain policy considerations and a summary of its review of the published exchange requirements as well as the applicable corporate law regimes that generally apply to issuers on the Alternative Investment Market, American Stock Exchange, Australian Securities Exchange, EuroNex/OMX, Johannesburg Stock Exchange, London Stock Exchange, NASDAQ National Market, New York Stock Exchange, Stock Exchange of Hong Kong and TSX Venture Exchange.
This request for comments comes in the wake of publicly expressed views by certain market participants that a requirement to obtain security holder approval for significant dilution is important to good corporate governance. In 2006, Robert McEwen, the former Chief Executive Officer of Goldcorp Inc. and holder of approximately 1.5% of the outstanding Goldcorp common shares, objected to the acquisition of Glamis Gold Ltd. by Goldcorp and the issuance of a significant number of Goldcorp common shares as consideration therefor. The TSX declined Mr. McEwen’s request that the TSX compel Goldcorp to seek shareholder approval of the transaction.
For more information on the issues raised in the Goldcorp/Glamis case, please see the November 2006 Blakes Bulletin on Securities Law entitled Ontario Court Affirms that Shareholder Approval is Not Required for Acquisitions by way of a Plan of Arrangement.
Any comments regarding the security holder approval requirements for acquisitions of public companies must be received in writing by the TSX by December 12, 2007.
The full text of the request for comments issued by the TSX is available on the Blakes Web site at www.blakes.com in our Publications – Mergers & Acquisitions section, together with a copy of this bulletin.
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.
Please join members of the Blakes Commercial Real Estate group as they discuss five key provisions of a commercial real estate purchase agreement that are often the subject of much negotiation but are sometimes misunderstood.
Emotional culture is influenced in great part by the mindset and actions of leadership, although employees also play more of a role than they may realize in creating the culture that exists in the group.
The session will be led by Dr. Robert Brooks, an award-winning author and psychologist. In his presentation, Dr. Brooks will describe the mindset and realistic practices of leaders and staff that help to nurture and sustain a culture characterized by positive emotions, satisfying, respectful relationships, a sense of meaning and ownership for one’s work, and enhanced job performance. Examples will be offered to illustrate strategies for developing a positive emotional culture in an organization.
Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.
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.
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).