26 LEXPERT
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WWW.LEXPERT.CA
Meghji, Al Osler, Hoskin & Harcourt LLP
(416) 862-5677 ameghji@osler.com
Mr. Meghji is widely recognized as one of Canada's leading tax litigators.
Counsel to many significant corporate taxpayers. Has successfully argued
numerous landmark cases, including the first GAAR case and the first
transfer-pricing case in the SCC.
McGlaughlin, Grant E. Fasken Martineau DuMoulin LLP (416) 865-4382 gmcglaughlin@fasken.com
Mr. McGlaughlin is a corporate
and securities lawyer who focuses on M&A, corporate finance, governance
and compliance. He advises investors, boards, special committees,
issuers and underwriters. He is a frequent author and speaker on various
topics in the areas of corporate finance, mergers & acquisitions and mining.
McCullough, Jonathan McCullough O'Connor Irwin LLP
(604) 646-3306 jmccullough@moisolicitors.com
Mr. McCullough is a founding partner and has been practising corporate
and securities law for 30 years. A focus of his practice is private equity
transactions, acting on behalf of both fund sponsors and institutional
investors in organizing domestic and international private equity funds
to invest in buyouts, mezzanine, venture capital, merchant banking,
infrastructure and timber assets.
May, Neill I. Goodmans LLP
(416) 597-4187 nmay@goodmans.ca
Mr. May focuses on all aspects of corporate/securities law, with emphasis
on M&A, private equity, and public and private financings. He is Co-Chair
of Goodmans' Corporate Securities Group and a former member of the TSX
Listing Advisory Committee and the OSC's Securities Advisory Committee
and Small Business Advisory Committee. Former Adjunct Professor at the
University of Toronto, Faculty of Law.
Matlow, David J. Goodmans LLP
(416) 597-4147 dmatlow@goodmans.ca
Mr. Matlow practises corporate finance/securities, private-equity
and M&A law. He acts for public and private companies in a range of
transactions, including financings, fund formation, initial public offerings,
regulatory matters and divestitures. He also acts for a number of private
equity firms in their investing activities. He is the Chair of the Jewish
Foundation of Greater Toronto.
Mathieu, Frank Stikeman Elliott LLP
(514) 397-2442 fmathieu@stikeman.com
Mr. Mathieu is a partner and member of the Tax Group. He specializes
in Canadian income tax law including income tax aspects of mergers &
acquisitions, corporate reorganizations and restructurings in a cross-border
context, and has extensive expertise in advising foreign private equity funds
in relation to their Canadian investments.
LEXPERT-RANKED LAWYERS
then the SPAC has to wind up and give the mon-
ey back to the investors."
e first SPACs didn't come to market in Can-
ada until 2015, although the TSX had launched
them in 2009. "at was just aer the financial
crisis, so it was not really a great time to introduce
a new financial product like that," says Pincus. It
also took the TSX "some time to implement the
rules to facilitate SPACs," adds Hong.
e inaugural SPAC ended in failure. In April
2015, Dundee Acquisition Corp. completed an
IPO by raising $112.3 million and targeted CHC
Student Housing Corp. as its qualifying acquisi-
tion. But by late January 2015, it announced that it
lacked sufficient cash to complete the transaction
because an overwhelming number of shareholders
opted to redeem their holdings in the SPAC.
e redemption option is one of the distinctive
features of SPACs and also, says Hong, one of the
obstacles to its success. "e first risk is that share-
holders must approve the deal," he says. "But the
primary challenge that I've seen is that there may
not be enough cash at the closing to fund the pur-
chase because of the investors' right to redeem and
get their cash back."
To compensate investors for having their capi-
tal held in a trust account for up to two years, a
SPAC usually offers shareholders "one share and
a warrant or half warrant that's exercisable at a
premium," says John Emanoilidis, co-head of the
M&A practice at Torys LLP. Shareholders, how-
ever, can redeem their investment but retain their
warrant, which can further threaten the financial
viability of an IPO.
To counter that potential problem, another in-
novative solution was created in Canada, says Pin-
cus. When Canaccord Genuity Acquisition Corp.
announced, in July 2017, that it intended to raise
$30 million for a SPAC, it "tied [shares and war-
rants] together, creating more alignments with the
shareholders, who can decide to stay in, in which
case they keep their warrant. ey do well if the
share price goes up or they can decide to go out, in
which case they get their money back with inter-
"THE FIRST RISK IS THAT
SHAREHOLDERS MUST APPROVE
THE DEAL. BUT THE PRIMARY
CHALLENGE THAT I'VE SEEN IS THAT
THERE MAY NOT BE ENOUGH CASH
AT THE CLOSING TO FUND THE
PURCHASE BECAUSE OF THE
INVESTORS' RIGHT TO REDEEM
AND GET THEIR CASH BACK."
- PETER HONG; DAVIES WARD PHILLIPS & VINEBERG LLP
