Poison Pills After Pulse Data: The "Unique Circumstances" Defence

Article by Stephen Erlichman*

Prior to September 27, 2007 securities lawyers, investment bankers, investors and Canadian public companies believed that the law in relation to poison pills had been relatively well settled in Canada. On that day, however, the Alberta Securities Commission ("ASC") released its oral decision in the Pulse Data case (followed by its written decision on November 30, 2007)¹. The ASC framed the issue it had to decide as "whether, in the acknowledged absence of a real and substantial possibility of an imminent auction to increase Shareholder value, it would be in the public interest to discontinue the operation of [Pulse's shareholder rights plan] with respect to the Offer in order to afford Pulse Shareholders the opportunity to tender their Pulse Shares to and have them taken up in accordance with the Offer". In fact, however, the ASC seemed to focus on a more narrow issue,