Governance Insights 2025 A Preview of 2025: 10 Legal Updates GCs, Boards and Investors Need to Know
In 2024, the SCC granted leave to appeal the decision in Lundin and agreed to hear from numerous interveners on the issue. 1 The hearing took place on January 15, 2025, and the Court’s decision is expected in the coming months. The SCC’s reasons are likely to address whether the Court of Appeal broadened the scope of an issuer’s disclosure obligations beyond what the legislature intended, and to also offer guidance on the meaning of “change in the business, operations or capital of the issuer.” Regardless of the result, Lundin will contribute significantly to shaping the legal framework for the way issuers communicate with investors. 3. C ontinued Shareholder Activism and the Scope of Target Defensive Measures Activism activity in Canada 2024 was consistent with historical levels. Notably, we saw two high-profile activist campaigns in 2024 (Gildan and Dye & Durham) whereby the investor achieved a decisive victory, in each case resulting in a wholesale change of the board – a feat rarely achieved even once in a single year. In 2024, the market also observed Canadian boards responding to activists by adopting new and creative uses of defensive measures, including a defensive private placement in the face of an ongoing activist “withhold” campaign (Mithaq) and a 15% trigger poison pill (Bitfarms). Although not all of these defensive measures, such as the 15% trigger poison pill, were ultimately successful, they are reflective of two trends and concerns that we think will continue to play out in 2025 and beyond. First, our securities law infrastructure and guidance regarding the scope of acceptable defensive measures need a refresh to address changes in the public M&A and activism markets in Canada that have transpired over the last two decades. Second, securities regulators should consider broadening their scope of intervention and providing streamlined solutions for certain disputes; forcing market participants to seek redress by applying to securities tribunals – or worse, backlogged courts – is not always a viable option for many disputes given the compressed timeframe in which contested M&A and proxy contests play out. For a more detailed discussion of Canadian activism in 2024 and trends to watch for in 2025, see our Governance Insights article, A Review of Shareholder Activism in Canada for 2024: Key Decisions and Trends to Watch for in 2025 .
1 Davies is acting for the Mining Association of Canada as intervener in the Lundin case.
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Davies | dwpv.com
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