Proposed takeover rules will produce winners and losers and need rethinking, according to a new report from the C.D. Howe Institute. In “The Future of Poison Pills in Canada: Are Takeover Bid Reforms Needed?,” author Anita Anand, a University of Toronto law professor, assesses the rules proposed by the Canadian Securities Administrators (CSA), and recommends a key change: do not implement the proposed 120-day bid period and retain the current 35 day period.
“The investor protection rules that apply in corporate takeover bids may soon undergo major changes in Canada,” says Anand. “Provincial and territorial securities regulators have proposed a new national framework for the regulation of takeover bids and this framework has significant ramifications for target shareholders, bidders and targets themselves.” she adds.
Under the new framework, takeover bids must receive tenders of more than 50 percent of the outstanding securities subject to the bid. Bids must remain open for a minimum of 120 days; a significant increase from the current requirement of 35 days.
C.D. Howe Institute – October 29, 2015.
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