Compulsory Acquisition – Generally under corporate law, if within 120 days of the bid, it is accepted by 90% of class of shares subject to bid (other than shares held by the bidder or its affiliates or associates), the bidder can require hold-outs to sell to the bidder for the same price as the bid. > The bid period of 105 days allows a successful bidder that achieves less than 90% to extend its bid for a further 10-day period in an effort to reach 90% and still have five days to commence the compulsory acquisition process. – Once notice is sent, the bidder will be entitled to acquire shares of non-tendering shareholders within 30 days, but each shareholder may apply to court to fix “fair value.” – For targets incorporated in Ontario, the procedure is available only if the bid was for voting securities. – For targets incorporated federally, the procedure is available only if the bid is made to all shareholders (e.g., cannot exclude U.S. holders in share exchange bid) unless an order is obtained.
Second-Step Business Combination/ Going-Private Transaction
– If the bidder acquires between 66 2/3% and 90%, it can still take the company private by means of a second-step shareholder-approved amalgamation or plan of arrangement. – Under Multilateral Instrument 61-101, shares acquired under the bid can be counted as part of the minority in a second-step amalgamation/plan of arrangement if the intention to do so is disclosed in the bid circular, the second-step transaction provides for the same consideration as the bid, the tendering shareholder did not receive a collateral benefit and certain other statutory requirements are met.
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Canadian Mergers & Acquisitions
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