LEXPERT MAGAZINE
|
MARCH 2016 53
| CONTESTED M&A |
Commission in Re Red Eagle are frequent-
ly cited as testimony to the inconsistencies.
Both cases involved private placements
to white knights in the face of hostile bids.
e Québec tribunal ruled that Fibrek's
placement, in the absence of a genuine need
for immediate funding, interfered improp-
the present, with acquirers and targets who
need to do business now perched on the
precipice of a new take-over regime whose
components and arrival date remain eva-
sive, is the more daunting. "Bidders and tar-
gets have been sitting around for quite some
time wondering where they stand and what
the rules are," says Rob Staley of Bennett
Jones LLP in Toronto.
Tomchak has been advising clients to as-
sume that regulators will not enforce the
proposed amendments until they are actu-
ally implemented. "At the same time, we
still advise them to implement a pill along
the lines of the CSA proposals," she says.
From a strategic perspective, of course,
the longer a bid remains open, the more
time a target has to seek white knights.
Under the existing regime, directors
must issue a circular evaluating the bid
within 15 days, and bids must remain open
for only 35 days. While defensive measures
such as poison pills are frequently used
to buy time, bidders can generally obtain
erly with a hostile bid from Resolute Forest
Products Inc. (previously AbitibiBowater).
In Re Red Eagle, the BCSC upheld a simi-
lar private placement on the grounds that it
was a legitimate financing.
HOWEVER UNCERTAIN the future may be,
"THE INVESTMENT
Canada Act process is now
more than ever a material
risk factor for consideration,
and could certainly affect
the valuation of targets."
SUBRATA BHATTACHARJEE BORDEN LADNER GERVAIS LLP
PHOTO:
SHUTTERSTOCK
