Preparing For The Unsolicited Bid

Market volatility, the recent decline in commodity prices, or in some circumstances a combination of these factors, has resulted in a significant decline in the trading prices of many Canadian public companies relative to historic levels. These market conditions give rise to the risk that companies may be subject to unsolicited offers that represent a premium to the current trading price, but represent only a fraction of historic trading prices. In these circumstances, it is likely the actions of directors in responding to an unsolicited offer will be subject to enhanced scrutiny from shareholders and potentially other stakeholders.

Regardless of whether an issuer views an unsolicited proposal as opportune, or opportunistic, both the board and management are often caught off guard. When unprepared, the unsolicited proposal can elicit a flurry of activity that could otherwise have been front-end loaded. The result is, at best, inefficient and stressful, and at its