OSC leaves takeover bid questions unanswered

Author: | Published: 1 Dec 2005

Canadian laws governing takeover bids generally allow a bidder to attach whatever conditions it considers appropriate to an offer to purchase the shares of a public company. Such conditions often include a minimum number of shares to be tendered into the bid, that regulatory approvals be obtained and that there be no material adverse change at the target company. Unlike their US counterparts, however, Canadian takeover rules do not allow a bidder to state that its offer is conditional on securing the necessary financing to support the bid. In Ontario, Section 96 of the Securities Act provides that where the consideration in a takeover bid is to be paid in cash, the bidder must make "adequate arrangements prior to the bid to ensure that the required funds are available to effect payment in full for all securities that the offeror has offered to acquire".

In late 2004 and early...