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ARTICLE · 31 MARCH 2008

Ontario Securities Commission Provides Guidance On Material Changes And M&A Negotiations

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In its recent decision in AiT Advanced Information Technologies Corporation, the Ontario Securities Commission gives direction to target corporations for determining when a material change occurring during the course of negotiating a merger and acquisition transaction would trigger a disclosure obligation under Ontario securities law.

CanadaFinance and Banking
Andrew Gray
Andrew Gray
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In its recent decision in AiT Advanced Information Technologies Corporation, the Ontario Securities Commission gives direction to target corporations for determining when a material change occurring during the course of negotiating a merger and acquisition transaction would trigger a disclosure obligation under Ontario securities law.

The OSC dismissed allegations that a director of AiT breached the Securities Act (Ontario) when AiT failed to disclose the negotiations with 3M after the letter of intent was signed and during the due diligence period that followed.

Background

3M made an unsolicited approach to AiT about a potential acquisition in February 2002. Executives of the two companies held meetings to discuss a transaction, 3M conducted some initial due diligence and then 3M indicated on April 24 that it would consider proposing a transaction at a price of $2.88 per share. The

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