Sufficient Information Rules – The bid can be commenced by either mailing or advertisement. The bid can be commenced by advertisement if, concurrently with (or before) the advertisement, the bid is filed and delivered to the target, a securityholders list is requested and, within two business days of receipt of the securityholders list, the takeover bid circular is sent to securityholders on the list. – The bidder must prepare and mail a takeover bid circular to all holders of the class of securities sought and holders of convertible securities. – The bidder must make additional mailings if bid terms are changed or important information has changed or arisen (except changes out of the bidder’s control). – The bid may contain any conditions except a financing condition. – If the bid is an “insider bid,” an independent valuation of the target’s securities and of any non- cash consideration being offered may be required unless an exemption is available. – Within 15 days of the bid, the target must prepare and mail a directors’ circular containing an acceptance/rejection recommendation by the board. – If the target board is unable to make a recommendation, the circular must disclose the reasons for not doing so.
Securities Commission Intervention
– In Canada, in contrast to the United States, no securities commission clearance is required for share exchange takeover bids. – Unlike in the United States, most litigation regarding takeover bids takes place before securities regulators rather than courts. – Securities regulators will intervene to halt a takeover bid if it is abusive of the target shareholders or the capital markets, even if it complies with all of the foregoing rules. – Securities regulators also have the power to intervene to prohibit target boards of directors from taking inappropriate defensive measures to block a bid for its securities.
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Canadian Mergers & Acquisitions
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