Taking AIM At The Mithaq Decision: A Critique

The recent decision of the Ontario Capital Markets Tribunal to allow a defensive private placement amidst a battle for control places another nail in the coffin for hostile bids in Canada

In a perplexing decision, Mithaq Canada Inc (Re), the Ontario Capital Markets Tribunal upheld a defensive private placement by a target corporation completed in the face of a hostile bid, effectively denying shareholders the opportunity to accept a premium offer. At the time of the bid the target company, Aimia Inc. (Aimia), had been locked in a bitter battle for control with its largest shareholder, Mithaq Capital S.P.C. (Mithaq), which began with a "vote no" campaign against Aimia's entire board in April 2023 and culminated in a hostile bid by Mithaq for Aimia in October of that year. In the midst of this battle, Aimia diluted its shareholders by 24.9% and placed shares in the hands of investors who had a stated intention of not tendering to Mithaq's offer. In a seemingly