Hostile Bids - You Can't "Just Say No" in BC

Directors contemplating their arsenal of takeover defences in Canada will want to read the full reasons of the BC Securities Commission, released yesterday, for cease trading the Lions Gate rights plan in April. That decision was upheld by the BC Court of Appeal a week later as not being "unreasonable". The attached reasons expand on the summary reasons released in May by the majority of the panel.  The written reasons of the third member of the panel have been promised but not yet released.

Lions Gate had adopted a rights plan on March 11 as a defensive measure to a bid made by Carl Icahn on March 1.  The Lions Gate Board had stated that it had no intention of seeking alternatives to the bid.  Instead, it was "just saying no" to the bid because the Board thought, with the benefit of advice from financial and legal advisors, that it was too low, opportunistic and coercive.  As a result of the Board's actions, Icahn made several improvements to the bid prior to