36 LEXPERT MAGAZINE
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JULY/AUGUST 2016
COVER STORY
Yellow
When Sprott Asset Management went
after two rival trusts invested in gold and silver
bullion – a sector where any kind of M&A
action is rare – it triggered an epic, but ultimately
successful, take-over battle
BY ANTHONY DAVIS
IN THE CASE
of two Canadian trust funds – funds holding a galleon's worth of bullion in gold and
silver bars – a failed proxy vote by one disgruntled institutional unitholder quickly swelled into one of
the most unusual, complex and lengthy hostile take-over attempts in recent Canadian history.
It unleashed rounds of litigation at securities commissions and courts in Alberta and Ontario, culmi-
nating in Sprott Asset Management LP's successful $1.2-billion unsolicited take-over of Central Gold-
Trust (CGT) on January 15, 2016. It was the first take-over of its kind in Canadian history. But Sprott's
management had their sights set on two targets, and one managed to escape — Silver Bullion Trust
(SBT), though it was much smaller than CGT, the golden prize eventually captured. is was aer a
hearty legal defence by the two targets' external counsel, Bennett Jones LLP.
e deal had all the makings of a legal thriller, with its drama, de legal gamesmanship and its impli-
cations for Canadian trusts in any future unsolicited transactions. "I have been involved in a lot of fairly
hostile transactions. Some very acrimonious ones," says John Ciardullo, the Toronto partner who heads
Stikeman Elliott LLP's corporate department. As Sprott's lead external lawyer, he, along with Arthur
Einav – the company's General Counsel and Corporate Secretary – spent much of 2015 leading Sprott's
legal efforts to win over unitholders at Central Gold Trust and their bullion. "is one took acrimony
to a new level," he says.
Sprott first announced intentions to go aer CGT and SBT on April 23, 2015. It was up against a
strong customer seller in Ontario's Spicer family, which founded the targeted trusts. And the Spicers had
hired a team at Bennett Jones, led by Toronto partner Robert Staley, Head of Shareholder Activism and
Critical Situations at the firm.
Brick Road
