The long-awaited amendments to the provisions of Canada's provincial securities legislation governing takeover and issuer bids (sometimes referred to as the Zimmerman amendments) took effect on March 31 2001. The amendments apply to each Canadian province that has securities legislation governing takeover and issuer bids, other than Québec, where the securities regulators are awaiting legislative approvals required to implement the amendments.
The amendments affect takeover and issuer bids in several material respects, including:
- extending the minimum amount of time that a takeover or issuer bid must be open for acceptance from 21 days to 35 days;
- extending the time in which an initial directors' circular must be delivered from 10 days to 15 days after the date of the takeover bid;
- allowing securities to be withdrawn by or on behalf of a depositing security holder at any time where the securities have not been taken up by the offeror in a takeover or issuer bid;
- changing the deadline for payment for securities taken up under a takeover or issuer bid from three calendar days to three business days after the take-up; and
- allowing a takeover bid to be started by advertisement provided that:
- on or before the date of the advertisement, the bidder files the bid and delivers it to the target;
- on or before the date of the advertisement, the bidder requests a shareholders' list from the target; and
- the bid is delivered to the target's shareholders within two days of receipt by the bidder of the shareholders' list.
As a result of the delay in the implementation of the amendments in Québec, pending such implementation it will be necessary for bidders and targets to comply with the rules under both the old and new regimes governing takeover and issuer bids. Where differences exist between the two regimes, the more onerous rules will prevail.