TSX Requests Comments Regarding Security Holder Approval Requirements For Public Company Acquisitions

Originally published in Blakes Bulletin on Mergers & Acquisitions, October 2007

On October 12, 2007, the Toronto Stock Exchange (TSX) issued a request for comments on its security holder approval requirements relating to acquisitions of public companies.

While the TSX rules currently require that shareholders must approve the issuance of listed securities as consideration in an acquisition when the number of securities to be issued exceeds 25% of the outstanding securities of the listed company, this requirement does not apply when the entity being acquired is a reporting issuer (or equivalent status) having 50 or more beneficial security holders, excluding insiders and employees. The TSX does, however, have the general discretion to require shareholder approval of transactions materially affecting control of a listed company. The TSX is now considering whether security holder approval requirements