New Guidance For Evaluating Poison Pills In Ontario

Eight years after the Canadian Securities Administrators (CSA) adopted fundamental amendments to Canada's take-over bid regime in May 2016, regulators and other market participants continue to grapple with the permissible uses of shareholder rights plans or "poison pills" in Canada.

In Riot Platforms Inc. v Bitfarms Ltd., the Ontario Capital Markets Tribunal (the "Tribunal") struck down a tactical shareholder rights plan that adopted a 15% trigger and, in doing so, provided a general framework for determining when a shareholder rights plan will be struck down as contrary to the "public interest". Riot follows a recent order of the Alberta Securities Commission (ASC) in Re Greenfire Resources Ltd., which cease traded a tactical shareholder rights plan that adopted a traditional 20% trigger but was targeted at a specific exempt take-over bid transaction. While the ASC has yet to release its reasons in Greenfire, these decisions, taken together, suggest that under