Developments In Defensive Tactics

It has historically been challenging for target boards in Canada to defend against hostile bids. In 2012, that challenge appeared to grow somewhat, but there are some suggestions that new rules expected to be proposed by the Ontario Securities Commission (OSC) in 2013 might ultimately provide target boards with new powers to defend against these bids.

In 2012, regulators continued their historical practice of ultimately cease-trading shareholder rights plans adopted by target boards

In Canada, the primary tactic used by target boards to defend their companies against hostile bids is the implementation of a shareholder rights plan, also known as a "poison pill." Canadian regulators have historically held that target shareholders have the right to decide whether to accept or reject a hostile bid, and that the only rationale for leaving a target company shareholder rights plan in place in the face of a hostile bid is to provide the target board with adequate time to