This summer, the Ontario Securities Commission (OSC)
demonstrated its regulatory reach in the proxy contest arena. The
OSC's statutory mandate is to provide protection to investors
from unfair practices and to foster fair and efficient capital
markets. The OSC took action on this mandate when it intervened in
the battle for control of Partners Real Estate Investment
Trust.
The "Mini-Tender"
On May 28, 2014, Orange Capital LLC, a New York-based hedge
fund, announced an offer, or "mini-tender", to purchase
10% of the outstanding units of the REIT at a price of $5.00 per
unit, a 7% premium to the then unit price. The offer was open until
June 12.
The offer would not have resulted in Orange Capital owning 20%
or more of the outstanding REIT units. As a result, it was not a
"take-over bid" and therefore not subject to the
procedural safeguards and disclosure requirements of the Canadian
take-over bid regime.
