4 Going public. If a shareholder wishes to on various exemptions from the proxy solicitation requirements. Unlike the issuer, a shareholder can rely on the “public broadcast” exemption allowing it to solicit proxies and support for its campaign without preparing and filing a proxy circular to shareholders (subject to complying with certain prescribed disclosure requirements). This strategy allows an activist to engage in a solicitation without incurring the additional costs and burdens associated with preparing and mailing a dissident information circular. Alternatively, or in combination with the public broadcast exemption, a shareholder may rely on an exemption allowing it to solicit proxies from no more than 15 shareholders, which can be particularly effective if ownership in the issuer is concentrated (e.g., if the top 15 shareholders represent a sizable make its concerns public, it may do so short of a formal proxy solicitation campaign by relying proportion of the issuer’s outstanding voting securities). Finally, a press release that merely states how the shareholder intends to vote and the reasons for its vote is not subject to the proxy solicitation rules.
including through a so-called mini-tender, which is discussed below under “Mini-Tenders as a New Tool in M&A Activism?” Finally, rather than try to derail the transaction, a shareholder may instead exercise its dissent rights under applicable corporate law and claim “fair value” for its shares after the transaction is completed. 3 Understand transaction timing. Public M&A transactions often play out in tight time frames, leaving shareholders little time to react, especially to launch a formal proxy solicitation campaign or seek redress in the courts or before a securities regulator. In some cases, the shareholders’ meeting to approve the deal may be as few as seven weeks after the transaction is first announced. Engaged shareholders should prepare a detailed calendar plotting key transaction dates, including the record date, proxy deposit deadline and deadline to file a note of dissent, to ensure that they meet deadlines for any particular action. The overall timeline and key dates within it will very much influence shareholders’ strategies, often dictating what is and is not feasible, irrespective of what might be optimally desired.
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Governance Insights 2020
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