OSC Releases Reasons In Hostile Takeover Bid

On October 24, 2016 the OSC released its reasons for decision with respect to the simultaneous hearing, held before the British Columbia Securities Commission and Ontario Securities Commission this summer. The decisions concerned a hostile bid by a senior mining company, Hecla, for a junior exploration company, Dolly Varden, as well as Dolly Varden's attempt to raise capital through a private placement.

The background of the decision can be found in our previous posting located here.

The Commissions were considering the following issues:

1. Hecla's application to cease a private placement issued by Dolly Varden, which Hecla alleged was an improper defensive tactic; and
2. Dolly Varden's application to compel Hecla to prepare a Formal Valuation pursuant to section 2.3 of MI 61-101 in conjunction with its hostile bid, on the basis Hecla was an insider of Dolly Varden (Hecla held 19% of Dolly Varden's shares and had management representation).