10 | SHAREHOLDER ACTIVISM Lexpert Special Edition
Cotnoir, Frédéric
McCarthy Tétrault LLP
(514) 397-4407
fcotnoir@mccarthy.ca
Mr. Cotnoir's practice
focuses on corporate
fi nance, mergers and
acquisitions, corporate
governance and the
regulation of fi nancial
institutions. His clients
include publicly traded
corporations, under writers,
banks and other
fi nancial institutions.
Crosbie, R. Ian
Davies Ward Phillips
& Vineberg LLP
(416) 367-6958
icrosbie@dwpv.com
Mr. Crosbie's domestic
and cross-border tax
practice includes public
and private M&A and
reorganizations, inbound
and outbound structuring,
private equity, fi nancing,
fi nancial products, general
corporate tax planning
and tax disputes.
Dalgleish, QC,
Terence
Davis LLP
(403) 698-8740
tdalgleish@davis.ca
Mr. Dalgleish focuses
on regulator y law before
the Alberta Utilities
Commission, the NEB
and energy tribunals
elsewhere in Canada. He
advises utilities and their
customers on acquisitions,
dispositions, facilities
approvals and tariff matters.
Craig, John H.
Cassels Brock &
Blackwell LLP
(416) 869-5756
jcraig@casselsbrock.com
Mr. Craig's securities
practice focuses on equity
fi nancings for under writers
and issuers, with an
emphasis on resource
companies, M&A,
take-over and issuer bids,
going-private transactions,
and international mining
and oil & gas agreements.
Cusinato, Curtis
Stikeman Elliott LLP
(416) 869-5221
ccusinato@stikeman.com
Partner and head of
Toronto's corporate
department. His clients
include private and
public companies and
multinationals in a wide
range of industries,
private-equity groups and
hedge funds, merchant
and investment banks and
fi nancial institutions.
Davies, QC,
Donald G.
Norton Rose Fulbright
Canada LLP
(403) 267-8183
don.davies@
nortonrosefulbright.com
Mr. Davies's energy
practice focuses on
regulator y and litigation
matters. His clients include
oil and gas producers,
pipelines, utilities and
industr y groups. He
appears before the
NEB and provincial
regulators , including the
AER and the AUC.
Vote Buying
In the heat of last year's campaign, Jana
accused Agrium of off ering to pay in-
vestment advisors 25 cents a share, up to
$1,500, if their clients voted their shares
in favour of existing directors — pro-
vided Agrium's slate won the contested
board election.
Vote buying , or the more neutral
term of dealer solicitation, raises eye-
brows because it can be viewed as di-
rectors using the company's cash to en-
trench themselves.
e practice of paying brokers to get
their clients to vote in a proxy contest or
M&A has been around a long time but
the incentive was traditionally off ered to
make sure shares were voted — not tied to
them being voted one
way or the other, says
Kathleen Keller-Hob-
son, an M&A partner
at Gowling Lafl eur
Henderson LLP.
She believes the way
it was used by Agrium
raises ethical questions
and "there is a fairly
prevalent view that it is
not appropriate." Judg-
ing from the buzz in
governance circles, she
says, she is doubtful it
will be used again soon.
"I think people would tread more care-
fully next time. Jana wasn't happy about it
and I wonder whether one wouldn't bring
an oppression action on the basis that that
is not appropriate from the corporation's
view, not a proper use of corporate funds."
But Keith Chatwin, a partner at Stike-
man Elliott LLP, is not so sure. He says it
comes back to the business judgment of
the board.
"If the board determines the circum-
stances justify whatever legal means are
necessary to ensure that the direction of
the company they've charted is adhered
to, then that's within their discretion to
determine.
"If they think certain shareholders don't
understand the value proposition that the
board has put in place and that manage-
ment is executing, and they think they can
drive the vote more powerfully through
an economic incentive, then perhaps they
think this is the right way to go."
He also says what Agrium did was not
buying votes in the truest sense.
" e company's not paying sharehold-
ers to tender their shares. You're paying
the advisor to make the eff ort to com-
municate with the individual on whose
behalf they hold the shares, to convince
them to vote. Might they be more persua-
sive about the virtues of existing manage-
ment if they receive an incentive to be so?
Perhaps. It does raise potential confl ict
concerns. But from a board perspective, I
don't know if that would necessarily com-
promise the discharge of my duties to the
corporation."
One thing most practitioners agree on:
Canada's growing shareholder activism
movement is not likely to fade away any
time soon.
" ere is money fl owing into activ-
ist funds like never before," says Hansell.
" e activist funds, for whatever reason,
are getting better performance than other
funds. So the phenomenon of the activist
is going to continue."
Sandra Rubin is a eelance legal aff airs writer.
"PEOPLE WILL FOLLOW
A CARL ICAHN OR A BILL
ACKMAN INTO A STOCK IN
ANTICIPATION THERE WILL BE
AN EVENT SUCH AS A NEW CEO,
A SALE OR A NEW STRATEGY."
– Orestes Pasparakis,
Norton Rose Fulbright Canada LLP
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