Take-Over Bid Rules Not Made To Be Broken – OSC Rejects Requested Relief From Minimum Tender Requirement

The Ontario Securities Commission (the OSC) recently released its decision rejecting a request from ESW Capital, LLC (ESW) for relief from the minimum tender requirement under Canadian take-over bid rules (the Relief) in connection with a proposed hostile take-over bid by ESW for Optiva Inc. (Optiva). This represented the first request for exemptive relief from the minimum tender requirement since adoption of the new take-over bid rules in 2016.

KEY TAKEAWAYS

In its decision, the OSC emphasized that:

• The purpose of the take-over bid rules is to provide a clear and predictable framework regarding the take-over bid regime in Canada
• It will not grant exemptive relief from the take-over bid rules unless there are exceptional circumstances or clear improper or abusive conduct that undermines minority shareholder choice