Timely Disclosure

Timely Disclosure

Updates and Commentary on Current issues in M&A, Corporate Finance and Capital Markets

Category Archives: Contested Situations

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Statutory Compliance, and the Continued Relevance of the Oppression Remedy, in the Wake of Mennillo v. Intramodal inc.

Posted in Contested Situations
In its decision Mennillo v. Intramodal inc., 2016 SCC 51 (Intramodal), the Supreme Court of Canada (Court) was asked whether a corporation’s failure to comply with statutory formalities was oppressive against a shareholder. The majority ruled that based on the facts the company’s failure to comply with certain Canada Business Corporation Act (CBCA) requirements did… Continue Reading

The SEC’s Proposed Amendments regarding the Use of Universal Proxies

Posted in Contested Situations, Corporate Governance, Securities Regulatory Authorities
In today’s marketplace, most shareholder voting is done by way of proxy. Few shareholders choose to attend shareholder meetings in person. Under the current rules of the U.S. Securities and Exchange Commission (SEC), shareholders who attend meetings in person typically receive a universal ballot, which allows shareholders to choose from a complete list of all… Continue Reading

Lessons from Trump’s Victory: 10 Questions that every target of shareholder activism should be asking itself

Posted in Contested Situations, Corporate Governance
In light of Donald Trump’s unorthodox campaign and unexpected victory, it may be worthwhile to consider whether there are any strategy lessons for those engaged in shareholder activism.  After all, a proxy contest is essentially a form of political campaign. Is angry rhetoric on the part of the activist more galvanizing than reasoned argument? In… Continue Reading

Is There Method in Seagate’s Madness in Inviting an Activist Wolf into the Fold?

Posted in Contested Situations, Corporate Governance, Mergers & Acquisitions
Seagate Technology’s Unusual Alliance with ValueAct Capital: Is There Method in Seagate’s Madness in Inviting an Activist Wolf into the Fold? Last month, Seagate Technology plc, an $11 billion company in the data-storage business, announced a secondary block trade in which it facilitated the transfer of roughly 9.5 million ordinary shares, representing an approximate 4% stake in… Continue Reading

Hostile Bid Launched Targeting Nordex Explosives Ltd.

Posted in Contested Situations, Mergers & Acquisitions
Nordex Explosives Ltd. (Nordex), a Canadian explosives manufacturer listed on the TSX Venture Exchange, and Société Anonyme d’Explosifs et de Produits Chimiques (EPC) entered into a private placement and subsequent going private transaction on June 15, 2016. EPC was to purchase Nordex shares for $0.12 per share. However, subsequent to Nordex’s announcement of the EPC… Continue Reading

Market Intelligence? The Limits of Market Custom and Why Market Practice May not be Best Practice

Posted in Contested Situations, Corporate Governance, Mergers & Acquisitions
The views expressed in this post, as in all of my posts, are mine alone and should not be taken to represent the views of Fasken Martineau DuMoulin LLP. “That’s off market.” As a deal lawyer, I’ve heard that phrase more times than I care to remember.  It’s supposed to be a knock-down argument.  We’re… Continue Reading

First Hostile Takeover Bid Launched Under New Canadian Regime

Posted in Contested Situations, Stock Exchanges
As a follow up to our previous post “Time will tell if the timing’s right: CSA adopt the most sweeping changes to the Canadian take-over bid regime in a generation” we are reporting on the first hostile take-over bid of a Canadian reporting issuer launched under the new rules that came into effect on May… Continue Reading

CSA Adopt Changes to Early Warning Rules but Maintain 10% Reporting Threshold

Posted in Contested Situations, Continuous & Timely Disclosure, Derivatives, Securities Regulatory Authorities
On February 25, 2016, the Canadian Securities Administrators (CSA) announced the adoption of new rules enhancing the reporting requirements relating to the early warning reporting system. The new rules are expected to come into force on May 9, 2016. The original proposals were published on March 14, 2013 (see our April 9, 2013 publication Canadian Securities… Continue Reading

Time will tell if the timing’s right: CSA adopt the most sweeping changes to the Canadian take-over bid regime in a generation

Posted in Contested Situations, Mergers & Acquisitions, Securities Regulatory Authorities
On February 25, 2016, the CSA released the final version of the long-awaited changes to the Canadian take-over bid regime.  While the final rules are largely in line with the proposal that was released for comment almost a year ago, it is notable that the statutory minimum bid period has been shortened from 120 days… Continue Reading

The Suncor – Canadian Oil Sands Board Demonstrates that the Board’s Recommendation Truly is a Prized Asset

Posted in Contested Situations, Mergers & Acquisitions
Earlier this week, Suncor Energy Inc. (Suncor) and Canadian Oil Sands Limited (COS) announced that they reached an agreement whereby COS agreed to support Suncor’s offer to acquire COS for $6.6 billion (including estimated debt of $2.4 billion), representing a 12% increase in the exchange ratio from the initial offer made by Suncor for COS… Continue Reading

Is it Really Just a Matter of Time? The Canadian Oil Sands Board is Given More Time to Find an Alternative, but its Recommendation may be its Greatest Bargaining Chip

Posted in Contested Situations, Securities Regulatory Authorities
Most of the recent headlines concerning the unsolicited takeover bid by Suncor Energy Inc. (Suncor) for Canadian Oil Sands Ltd. (COS) surround the decision of the Alberta Securities Commission (ASC) to allow COS’s tactical shareholder rights plan to remain in place until January 4, 2016.  While that decision is noteworthy on its own, what may… Continue Reading

2016 ISS and Glass Lewis Updates

Posted in Contested Situations, Corporate Governance, Directors & Officers, Proxy Voting, Stock Exchanges
Institutional Shareholder Services (ISS) and Glass, Lewis & Co. (Glass Lewis) have both released updates to their Canadian proxy voting recommendation guidelines for the 2016 proxy season. The following summary outlines the significant changes made by ISS (ISS Updates) and Glass Lewis (Glass Lewis Updates) to their respective Canadian proxy advisory guidelines. ISS Definition of… Continue Reading

Responding to the Activist: Compensating the Special Committee

Posted in Contested Situations, Corporate Governance, Directors & Officers, Mergers & Acquisitions
As we have noted in our previous post, a special committee appointed to lead a company’s response to an activist can expect to receive a greater degree of public scrutiny, but may take comfort from the fact that the legal standard against which its members will be judged will not change.  While that should provide… Continue Reading

Responding to an activist: While special committee members may face greater public scrutiny, they are not subject to a higher legal standard

Posted in Contested Situations, Corporate Governance, Directors & Officers, Mergers & Acquisitions
As we discussed in our previous post, a special committee established in response to an activist’s approach should be comprised of independent board members with the relevant expertise and the time to participate meaningfully. While we have written about some of the benefits to the company of incorporating a special committee process into its response… Continue Reading

Responding to an activist: When appointing a special committee, select the members with care

Posted in Contested Situations, Corporate Governance, Directors & Officers, Mergers & Acquisitions
As we discussed in our previous post, when a board finds itself in the crosshairs of an activist, establishing a special committee of unconflicted directors with clear marching orders from the board may allow for more thoughtful decision-making under pressure and lend credibility to the company’s response, particularly where management’s performance is under attack.  Equally… Continue Reading

When responding to an activist, a special committee’s credibility is enhanced by a clear mandate from the board

Posted in Contested Situations, Corporate Governance, Directors & Officers
As we discussed in our previous post, a board faced with the arrival of an activist on the scene can benefit from establishing a special committee of independent directors.  While a quick response time is one of the more obvious benefits of having a small group of directors lead the charge, a committee of unconflicted… Continue Reading

When an activist comes knocking, consider a special committee to develop a quick and credible response.

Posted in Contested Situations, Corporate Governance, Directors & Officers
Much has been written about how companies can prepare for, and hopefully avoid, a confrontation with an activist shareholder.  While many boards are heeding the call for greater shareholder engagement and oversight of management, each year witnesses a significant number of activist campaigns and proxy contests.  So what is a board to do when its… Continue Reading

New Take-Over Bid Rules Seek to Level the Playing Field … But Will Bidders Still Play?

Posted in Contested Situations, Securities Regulatory Authorities
On March 31, 2015, the Canadian Securities Administrators issued their highly anticipated proposal to make the most significant changes to the Canadian take-over bid regime in years, one of the stated goals of which is to “rebalance the current dynamics” between bidders, boards and shareholders. The three principal changes would (i) mandate a 50% minimum… Continue Reading

Study of hostile take-over bids in Canada reveals that a change of control is not inevitable

Posted in Contested Situations, Corporate Governance, Directors & Officers, Mergers & Acquisitions
Fasken Martineau’s 2015 Canadian Hostile Take-Over Bid Study sets out the results of a ten-year empirical analysis of hostile take-over bids in Canada. Key findings include: When initiating a public contest for control, a hostile bidder was successful more than half the time; however, a change of control was by no means inevitable, with targets… Continue Reading

2015 ISS and Glass Lewis Updates

Posted in Contested Situations, Mergers & Acquisitions
Institutional Shareholder Services (ISS) and Glass, Lewis & Co. (Glass Lewis) have both released updates to their Canadian proxy voting recommendation guidelines for the 2015 proxy season. The items updated include those pertaining to the definition of independence, advance notice requirements, by-law amendments, private placements, treatment of majority voting policies, shareholder rights plans and advance… Continue Reading

The End of Poison Pills?

Posted in Contested Situations, Corporate Governance, Mergers & Acquisitions, Securities Regulatory Authorities
The Canadian Securities Regulators (the CSA) have just agreed on major changes that are set to transform the take-over bid regime that has prevailed in Canada during the last three decades.  CSA Notice 62-306 (the CSA Proposal), issued on September 11, 2014, reconciles the competing proposals for poison pill reform initially introduced in March 2013 by the CSA and Autorité des… Continue Reading

Canadian Proxy Contest Study – 2014 Update

Posted in Contested Situations, Corporate Governance, Mergers & Acquisitions, Proxy Voting
A follow up to our ground-breaking 2013 Canadian Proxy Contest Study, our 2014 Update sheds additional light on some of the issues and trends that we previously identified and raises a few new issues for further thought.  Among the highlights of last year’s Canadian market experience in proxy contests were the following: 2013 witnessed a… Continue Reading