March 18, 2013
Canadian Companies Will Be Harder to Acquire Under New Poison Pill Proposals
As noted in this Torys memo: “The Canadian Securities Administrators have released proposed new rules for shareholder rights plans (or “poison pills”). Under the CSA proposal, target boards will be free to deploy a poison pill for a longer period than is currently permitted in the face of an unwanted bid, subject to obtaining shareholder approval. Quebec’s securities regulator, the AMF, is proposing an alternative new regime governing all defensive tactics (not just poison pills) that would give target boards even greater discretion to defend against hostile bids. We expect that only one proposal would be implemented in order to ensure harmonized rules. The CSA and AMF proposals remain open for comment until June 12, 2013. Under either of these proposals, bidders should expect hostile bids to become more challenging because target boards will have broader scope to defend against hostile bids.”