Securities Regulators Clarify Ground Rules For Take-Over Bids In Canada

Summary

On March 16, 2018, the Ontario Securities Commission (OSC) and the Financial and Consumer Affairs Authority of Saskatchewan (FCAAS) issued the reasons for their decision in Re Aurora Cannabis Inc. to, among other things, cease trade a shareholder rights plan adopted by CanniMed Therapeutics Inc. (TSX: CMED) in response to a hostile take-over bid for CanniMed made by Aurora Cannabis Inc. (TSX: ACB). This is the first time that a rights plan has been challenged since Canada's take-over bid regime was revamped in 2016. The reasons provide some initial guidance by two of Canada's securities regulators as to the approach they may take in the context of hostile take-over bids under the new regime, including with respect to the role of shareholder rights plans and lock-up agreements.