In Focus: M&A Activism – Practical Guidance for Issuers and Shareholders
Despite the decline in activism involving Canadian- listed issuers in the wake of COVID-19, Canadian public M&A activity has remained healthy, particularly in the resource sector. Issuers undertaking a change of control transaction should remain mindful of potential criticism when conducting a sale, especially in the midst of continued economic uncertainty. Even though markets have recovered from their early 2020 lows, some shareholders may feel that their shares have been undervalued in a transaction. Even in less volatile economic times, shareholders are willing to challenge a transaction for other reasons as well, including due to perceptions that target boards have undertaken inadequate processes or in cases where value appears to have been transferred to management or other insiders at the expense of shareholders. Below we offer some practical guidance to issuers wishing to protect their deals from shareholder challenges. We also offer similar guidance to shareholders that may wish to mount a challenge to a proposed transaction.
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Governance Insights 2020
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