Shareholder Approval Issues In The Spotlight Following OSC Decision

The Ontario Securities Commission has ruled that HudBay Minerals must obtain shareholder approval prior to completing its proposed acquisition of Lundin Mining. This decision could have significant implications for future public company transactions involving the issuance of shares.¹

TSX rules currently require shareholder approval of transactions involving the issuance of 25% or more of a company's outstanding shares. This requirement does not apply to a listed company that is acquiring another public company, provided that the transaction does not materially affect control of the listed company. TSX also retains the discretion to require shareholder approval, taking into account the effect that the transaction may have on the quality of the marketplace, depending on various factors.