Skip to content.

Canadian Going Private Transactions: Practices and Procedures

Transactions Documentation:Circulars

In the context of an acquisition of a Canadian public company by way of takeover bid or business combination, other than the agreements described in our last post, one of the main transaction document to be prepared is the circular.

See Chinese version below [中文版参阅下文].

If the transaction has been structured as a take-over bid, the key public documents will be (i) a take-over bid circular from the bidder which sets out the terms of the offer and other relevant information about the bidder, and (ii) a directors’ circular from the board of directors of the target company containing a recommendation from the board for the target company’s shareholders to either accept or reject the offer (in rare cases the board chooses not to make a recommendation, in which case it must provide an explanation of why no recommendation has been made). Both documents must be mailed to all target shareholders; the directors’ circular is required to be sent within 15 days of the mailing of the take-over bid circular. Where the take-over bid is a friendly transaction and a support agreement has been signed, very often the take-over bid circular and the directors’ circular are prepared concurrently and sent to shareholders in one package. Both the bid circular and the directors’ circular must be translated into French if there are shareholders in Québec (unless a de minimis or other exemption from the translation requirement is obtained).

Where the transaction is structured as a business combination, the key document that is provided to shareholders is the management information circular for the shareholders’ meeting that is required to be held by the target company. Although this document comes from the target company to its shareholders, it will be prepared as a collaborative effort by both the bidder and the target company. Unlike with a take-over bid circular and directors’ circular, this management information circular is not required to be translated into French, although a French language version may be provided where there are a significant number of shareholders in Québec. Given that a business combination requires the cooperation of the target company to call a shareholders’ meeting and prepare the management information circular, these acquisition structures are almost never used for hostile acquisitions where the cooperation of the target company will not be available. A hostile bidder will almost always proceed by way of a take-over bid.

For securities exchange transactions where the consideration for the target company’s securities includes securities of the acquirer, the take-over bid circular or management information circular must contain, or incorporate by reference from documents previously filed with Canadian securities regulators, prospectus-level disclosure concerning both the acquirer and the target. If the acquirer is not already a Canadian reporting issuer, the preparation of this disclosure (which includes pro forma financial statements) can add to the time required to launch the transaction because the disclosure cannot be incorporated by reference. If the bidder is a TSX-listed company and is issuing securities under the offer (whether structured as a take-over bid or as a plan of arrangement) that would cause dilution to its shareholders of more than 25%, it will be required by the TSX to seek approval from its own shareholders prior to completing such an offer.

交易文件: 股东通告

在以要约收购或企业合并方式对一个加拿大上市公司进行收购时, 除了需要签订我们在上一篇文章中描述的协议外,还需要准备的主要文件是股东通告。

如果交易结构是要约收购,则重要的公开文件将是(i)出价人发出的通告,其中列明收购条件和关于出价人的其他有关信息;以及(ii )目标公司董事会的通告,其中载有董事会关于目标公司股东接受或拒绝要约的建议(在极少数情况下,董事会选择不提出建议,在这种情况下,董事会必须提供为何未提出建议的说明)。这两份文件都必须邮寄给所有目标公司的股东; 董事会的通告必须在收到要约收购通知后的15天内寄出。如果要约收购是善意交易和已经签订了支持协议的情况下,则要约通告和董事会的通告通常同时准备并一次发送给股东。如果有股东在魁北克的话,则要约收购通告和董事会通告都必须译成法文(除非得到对翻译的最低要求或免于翻译)。

当交易结构是以企业合并形式的情形中,向股东们提供的重要文件是目标公司召开股东会议的管理委任通告。虽然这个文件是目标公司发给其股东的,但这将是经收购方和目标公司的合作努力而编制的。与要约收购通告和董事通告不同的是,这个管理委任通告不要求被译成法文,但是如果在魁北克地区具有相当多的股东,就有可能需要译成法文。鉴于企业合并需要目标公司的合作,这样才能召开股东会议并准备管理委任通告,这个收购结构几乎从来不用于恶意收购的情形中,因为无法得到目标公司的合作。恶意收购的收购方几乎总是通过要约收购这一途径而开始进行收购。

在证券交换交易中,如果目标公司证券的对价包括收购者的股票,要约收购通告或管理委任通告就必须包括引用之前向加拿大证券监管机构提交的文件中有关收购方和目标公司的信息(招股章程级别的披露)。如果收购方不是加拿大的证券发行人,则无法引用之前提交的披露文件, 准备这些披露文件(包括预计财务报表)会延长收购方准备要约收购所需的时间。如果收购方是多伦多证券交易所上市的公司并且在收购交易中发行股票 (以要约收购或是企业合并的形式)从而会引起将其股东的股票稀释百分之二十五以上的话,则多伦多证券交易所就会要求在收购完毕之前需得到收购方股东的批准。

Authors

Subscribe

Stay Connected

Get the latest posts from this blog

Please enter a valid email address