www.lexpert.ca/usguide-corporate/ | LEXPERT • June 2016 | 29
in those transactions. They rebalance the playing field, barring the
most coercive elements of hostile bids under the current regime and
providing target boards ample time to explore all potential alterna-
tives to a hostile bid, without varying the principle that a target board
cannot indefinitely "just say no" to a hostile bid. Although the new
rules have, we believe, significantly improved the landscape in Can-
ada, they leave open questions that may draw securities regulators
into a contested take-over bid as market participants adapt to the new
regime and deploy new defensive tactics.
Whether this affects the role of securities regulators in Canada in
policing the conduct of target directors more broadly remains to be
seen. There has been a longstanding debate as to whether securities
regulators are best positioned to determine issues involving the fidu-
ciary duties of target boards, partly based on their jurisdiction and
partly on their expertise, but also because of the limited array and
blunt nature of remedies available to them.
The new rules represent, in some important ways, a step away from
the regulators' traditional views on the appropriate roles of both
boards and the regulators themselves in the context of corporate
contests for control. The obvious next step – one that we believe is
long overdue – would be a broader re-examination of NP 62-202 and
consideration of whether courts or securities regulators should have
primary responsibility for reviewing the conduct of target directors
in the face of a hostile bid.
Gesta Abols Goodmans LLP - (416) 597-4186 - gabols@goodmans.ca
Partner. Practice focuses on M&A, corporate finance, strategic investments and business restructurings. Ad-
junct Professor at the University of Toronto Faculty of Law. Active member of the Mergers & Acquisitions
subcommittee of the Business Law Section of the American Bar Association. Regular speaker at industry
and professional conferences and author of numerous articles on M&A and corporate finance.
Grant McGlaughlin Goodmans LLP - (416) 597-4199 - gmcglaughlin@goodmans.ca
Partner. Practice focuses on M&A, corporate finance and governance and compliance matters. Advises is-
suers, underwriters, investors, boards and special committees on a wide range of corporate transactions and
governance matters. Head of Goodmans' Mining and Natural Resource Group. Past member of the Securi-
ties Advisory Committee advising the Ontario Securities Commission on legislative and policy initiatives,
and capital market trends. Co-chair of the World Law Group's Energy, Mining and Clean Tech Group.
Michael Partridge Goodmans LLP - (416) 597-5498 - mpartridge@goodmans.ca
Partner. Practice focuses on M&A, private equity and corporate finance. Extensive experience representing
mining companies in international M&A and corporate finance transactions. Advises boards and activist
shareholders on governance and proxy contests. Formerly practiced in Silicon Valley representing emerging
growth companies, publicly traded technology companies and venture capital funds. Recognized by Lexpert®
and e Best Lawyers in Canada. Corporate and Securities law editor of the Toronto Law Journal.
TAKE-OVER BID REGIME
