Canadian Mergers & Acquisitions (10th ed)

CHAPTER 03 Pre-bid Considerations

Selecting Transaction Structure: Plan of Arrangement vs. Takeover Bid vs. Amalgamation

Plan of Arrangement

Takeover Bid

Amalgamation

– Merger effected by securityholder vote and court approval – Acquirer and target enter into arrangement agreement – Acquirer may enter into voting support agreements with significant securityholders – Target mails proxy circular to securityholders (no regulatory review) – Securityholders approve at meeting (locked-up shares can be voted) – Obtain court approval as to “fairness” – Cash and/or securities – Discrimination among securityholders permitted, subject to “fairness” and majority-of-the-minority approval

– Purchase of shares effected by offer directly to securityholders – Acquirer and target enter into support agreement (if friendly) – Acquirer may enter into lock-up agreements with significant securityholders – Acquirer mails takeover bid circular to securityholders of target (no regulatory review) – Target mails directors’ circular to securityholders of target (no regulatory review) – Securityholders tender to offer – Cash and/or securities – Discrimination among securityholders prohibited, except for certain employment arrangements or with securities commission approval (time requirement: approximately four weeks) – Approximately 50 to 65 days from commencement of preparation of circular to consummation of transaction, assuming target board waives minimum bid period of 105 days down to 35 days

– Merger effected by securityholder vote

What is it?

– Acquirer and target enter into merger agreement – Acquirer may enter into voting support agreements with significant securityholders – Target mails proxy materials to securityholders (no regulatory review) – Securityholders approve

How is it accomplished?

at meeting (locked-up shares can be voted)

– Cash and/or securities – Discrimination among

securityholders permitted, subject to majority-of-the- minority approval

Consideration

– Approximately

50 to 65 days from commencement of preparation of circular to consummation of

45 to 60 days from commencement of preparation of circular to consummation of transaction

Timing (See Appendix)

transaction (but faster than takeover bid if bid requires second-step transaction)

Davies | dwpv.com