Major Changes To Canada's Take-Over Bid Rules

The Canadian Securities Administrators ("CSA") have announced major amendments (the "Amendments") to the Canadian take-over bid regime that are expected to come into force on May 9, 2016 throughout Canada.¹

The Substance and Purpose of the Amendments

The Amendments reflect a re-balancing of the dynamics among offerors, offeree issuer board of directors ("offeree boards") and offeree issuer security holders ("offeree security holders"). According to the CSA, the Amendments are intended to (i) facilitate the ability of offeree security holders to make voluntary, informed and co-ordinated tender decisions, and (ii) provide offeree boards with additional time and discretion when responding to a take-over bid. In effect, the Amendments take many aspects, as will be seen below, of privately-enacted shareholder rights plans and turn them into mandatory default rules for Canadian issuers.