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New CSA Rules - Amendments to Canada’s Take-Over Bid Regime

This year, the Canadian securities regulator will propose significant changes to the takeover bid regime with the goal of providing target boards more time to respond. In Canada, the only way to acquire legal control of a public company without consent of the target board is to submit a takeover bid made directly to shareholders.

In the past, there has been criticism on the current regulatory system as it unduly favours bidders over targets and their shareholders. However, with the new changes there are rising concerns around whether the new rules will serve to actually dampen the merger and acquisition activity in the country.

The Canadian Securities Administrators will release a new revised proposal late this fall (2015) that will incorporate comments received during a spring consultation period. They are anticipating the proposal coming into full force in early 2016.

The 3 Main Rule Changes:

  • Meet a minimum tender requirement where bidders must receive tenders of more than 50% of the outstanding securities that are subject to the bid (excluding securities owned by the bidder itself or its joint actors)
  • Be extended for an additional 10 days after the minimum tender requirement is met and all other terms and conditions of the bid have been complied with or waived
  • Remain open for a minimum deposit period of 120 days, unless the target board states in a news release an acceptable shorter deposit period of not less than 35 days, in which case the shorter period would apply to all concurrent take-over bids

For more information visit: Canadian Securities Regulators Propose Significant Amendments to Canada’s Take-Over Bid Regime

Derek May
HUB International Professional
D: (604)331-5464
E: derek.may@hubinternational.com

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