On September 11, 2014, the Canadian Securities Administrators
("CSA"), the authorities responsible for the regulation
of Canadian securities markets, issued CSA Notice 62-306 proposing
significant changes to the takeover regime. The proposals represent
a change in methodology from the approaches presented by the CSA in
March, 2013, which addressed the permissible use of "poison
pills" (shareholder rights plans) in response to hostile
takeovers. In recent years the CSA had appeared divided on this
issue, which has often been framed in terms of the question who
should have the biggest say on responding to a hostile takeover,
the target's directors or its shareholders?
In the context of hostile bids, the purpose of a poison pill is
to put greater control in the hands of the target's board.
Poison pills are often considered by boards to be necessary in
light of the current takeover bid regulatory regime which is
generally viewed as being favorable to bidders. Restrictions
