The latest version of a proposal to change Canada’s
shareholder rights regime could render poison pills irrelevant.
|Boards will now
have more time to consider a bid
It would impose a set time period for bids,
limiting how long boards have to consider an offer, but also
extending the timeline beyond existing precedent.
This latest plan is a compromise between earlier
proposals from the Canadian Securities Administrators (CSA) and
Quebec securities regulator. A number of divergent court rulings on whether to allow shareholder
rights plans, known as poison pills, to stay in place has
created uncertainty in the market.
The proposal should strike a balance by giving boards a statutory time limit
to explore alternative options while also allowing shareholders
to vote on offers.
"The hope is this will lead to fewer rights plans and fewer
rights plans hearings," said Vincent Mercier, a partner at
Davies Ward Phillips & Vineberg...