Photo of Joe BrennanBy Joe BrennanFebruary 29 2016
Business Law

CSA Amends Take-Over Bid Regime

The Canadian Securities Administrators (CSA) recently announced certain amendments to the “take-over bid” rules under Canadian securities law.   

These rules are triggered when an acquiror (with any joint actors) crosses, or wants to cross, a 20% ownership threshold of a target’s outstanding equity or voting securities. 

When a person acquires, or offers to acquire, shares of a reporting issuer than will cause that person’s total ownership to exceed the 20% threshold, the takeover bid rules are triggered and the acquiror must make the same offer to all of the target’s shareholders by way of a formal takeover bid circular unless an exemption is available.

The recently adopted amendments to the take-over bid rules will require that all non-exempt take-over bids:

  1. receive tenders of more than 50% of the outstanding securities of the class that are subject to the bid, excluding securities beneficially owned, or over which control or direction is exercised, by the offeror or by any person acting jointly or in concert with the offeror (the “Minimum Tender Requirement”);
  2. be extended by the offeror for an additional 10 days after the Minimum Tender Requirement has been achieved and all other terms and conditions of the bid have been complied with or waived (the “10 Day Extension Requirement”); and
  3. remain open for a minimum deposit period of 105 days (the “105 Day Deposit Period”) unless:
    1. the offeree board states in a news release a shorter deposit period for the bid of not less than 35 days, in which case all contemporaneous take-over bids must remain open for at least the stated shorter deposit period, or
    1. the issuer issues a news release that it intends to effect, pursuant to an agreement or otherwise, a specified alternative transaction, in which case all contemporaneous take-over bids must remain open for a deposit period of at least 35 days.

The amendments will come into force on May 9, 2016.

Invitation for Discussion:

If you would like to discuss the topics raised herein or any other business law matter, please do not hesitate to contact one of the lawyers in the Business Law group at Nerland Lindsey LLP.


Note that the foregoing, and the attached document, are for general discussion purposes only and should not be construed as legal advice to any one person or company. If the issues discussed herein affect you or your company, you are encouraged to seek proper legal advice.

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