8 | SHAREHOLDER ACTIVISM Lexpert Special Edition
Cannon, Douglas A.
McCarthy Tétrault LLP
(416) 601-7815
dcannon@mccarthy.ca
Mr. Cannon is a tax
partner focusing on
domestic and cross-border
M&A, divestitures,
reorganizations, fi nancial
products and investment
funds. Also advises on
tax aspects of business
operations, including
transfer pricing, and
acts in CRA disputes.
Carfagnini, Jay A.
Goodmans LLP
(416) 597-4107
jcarfagnini@goodmans.ca
Mr. Carfagnini's practice
includes a focus on
corporate reorganizations,
with an expertise in cross-
border and international
transactions involving
the US and the UK.
He has been an advisor
in most recent major
Canadian restructurings.
Chadwick, Robert J.
Goodmans LLP
(416) 597-4285
rchadwick@goodmans.ca
Mr. Chadwick focuses on
corporate, banking, private
equity, insolvency and
reorganizations, and M&A
law on national, cross-
border and international
transactions. He counsels
a diverse group of clients,
including boards, in
various industries.
Carelli, Robert
Stikeman Elliott LLP
(514) 397-2408
rcarelli@stikeman.com
Mr. Carelli focuses on
securities, corporate
fi nance, public and
private M&A and
governance. Advises
issuers and under writers
in the context of public
off erings and private
placements, investment
funds, purchasers, sellers
and private- equity funds.
Castiel, Peter
Stikeman Elliott LLP
(514) 397-3272
pcastiel@stikeman.com
Mr. Castiel is head
of Montreal M&A
group. Focuses on
cross-border M&A and
corporate fi nancings.
Advises private-equity
funds, sovereign wealth
funds, leading public
and private companies
in connection with
acquisitions, divestitures
and investments.
Chaiton, Harvey G.
Chaitons LLP
(416) 218-1129
harvey@chaitons.com
Mr. Chaiton's insolvency
practice emphasizes
domestic and cross-
border receiverships and
restructurings, including
insolvency litigation. His
clients include fi nancial
institutions, creditors,
debtors, monitors,
receivers and trustees.
Social Media
Once Icahn had acquired a large enough
position in the Calgary energy company
and was ready to approach management
about board representation, he tweeted
the news.
With the push of a button, he threw
out the rulebook for running proxy cam-
paigns in Canada.
is was not a legendary 77-year-old
investor co-opting the younger genera-
tion's micro-blogging habits; this was a
wily campaigner using social media to
perform alchemy on Talisman's share-
holder base.
e tweet instantly
got the attention of
event-driven investors
who bought Talisman
in anticipation Icahn
would push for a cor-
porate overhaul.
"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," says
Orestes Pasparakis
of Norton Rose Ful-
bright Canada LLP.
at o en re-
sults in 20 to 30 per cent of the shares
changing hands within a week or two,
says Pasparakis, co-chair of his fi rm's
Canadian special situations team.
e new shareholders can be counted
on to back any coming board challenge
at much higher levels than those who just
bailed out.
So, from an activist's perspective, if they
accumulate 10 per cent of the company's
stock themselves and have another 20 per
cent of aggressive like-minded investors
who follow them into the stock, he says,
"all of a sudden you're at 30 per cent —
which gives you a good base from which
to pursue a board change."
In the meantime, all the buying usually
sends the share price up, which makes the
activist look even better.
"It makes the activist look like the
smart money. At the same time it also
makes them some money right up
front, so it provides them with a fi nan-
cial cushion.
"And people suddenly want to know
what the board is going to do in the face
of these criticisms. ey start scrutinizing
the company and looking at why the ac-
tivist is coming in, what changes ought to
be made and what the upside is. at puts
tremendous pressure on the board."
Pasparakis says the question of whether
to go public right up front using social
media and the Internet has quickly be-
come "the dominant strategic decision in
a campaign."
But it's not the only one.
Golden Leashes
Another tactical decision that activists
have had to make is whether to use gold-
en leashes.
e issue was thrust into the spotlight
last year in the fi ght between Agrium and
New York-based Jana, its largest share-
holder. When the fertilizer maker reject-
ed Jana's suggestion the company spin off
its retail business to boost shareholder re-
"ALTHOUGH AMERICAN ACTIVISTS
HAVE BEEN CATALYSTS FOR
CHANGE, TO THE EXTENT THAT
THEY EFFECT CHANGE IT OFTEN
INURES TO THE BENEFIT OF
THE ENTIRE SHAREHOLDER BASE,
AND THEORETICALLY TO THE
BUSINESS COMMUNITY AND
THE ECONOMY AS A WHOLE."
– Garth Girvan, McCarthy Tétrault LLP
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