Types of M&A Transactions
– Takeover bids (like a U.S. tender offer) – Plans of arrangement – Amalgamations (like a U.S. merger) – Asset sales – Share sales (e.g., private purchase of control block)
– Restructurings (e.g., spinoffs) – Going-private transactions
Takeover Bid Regulation: General
TAKEOVER BID REGULATION – Takeover bids are regulated by each province, but Canadian securities regulators have harmonized the takeover bid regime across Canada under National Instrument 62-104 and National Policy 62-203. – Applicable laws depend on where the target shareholders reside and where the target is incorporated and listed. WHAT IS A TAKEOVER BID? – Rules provide a “bright line” test to determine whether a party is making a takeover bid. – A takeover bid is an offer to acquire voting or equity securities of a class made to persons in a Canadian jurisdiction where the securities subject to the offer plus securities beneficially owned by the bidder and its affiliates and joint actors constitute 20% or more of the outstanding securities of the class (calculated on a partially diluted basis). – Equity securities include non-voting common shares. – A trap for the unwary: calculation of current beneficial ownership includes securities convertible within 60 days into the class of equity or voting securities (e.g., options and warrants). – Indirect offers: > “Anti-avoidance” rule. > Indirect offer rule could apply when an acquirer acquires shares of a holding company that owns more than 20% of the shares of a public company when aggregated with the acquirer’s shares.
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Canadian Mergers & Acquisitions
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