CSA Proposes Significant Changes To M&A Regulation In Canada

The Canadian Securities Administrators (CSA) have proposed a new rule governing shareholder rights plans, or "poison pills", that would provide target boards with the ability to unilaterally delay a take-over bid for a minimum of ninety days. Under the proposed rule, the target may leave a rights plan in place in the face of a hostile bid indefinitely, provided that a majority of the target's security holders approve the rights plan. If implemented, the proposed rule would be a significant development for M&A practice in Canada and would likely make the process of completing a hostile bid in Canada more expensive and subject to considerably more uncertainty from the point of view of a bidder.