Establishing a Toe-Hold / Early Warning

See Chinese version below [中文版参阅下文].

In Canada, it is permissible for a third party considering a take-over bid to purchase up to 9.99% of the target company’s outstanding securities in the market without any requirement to identify itself and its holdings through disclosure. This is in contrast to similar requirements in the United States which arise at the 5% level. Once the third party purchases securities taking it to or over the 10% threshold, it must give notice to the market by issuing a press release no later than the opening of trading on the next business day and filing, within two business days, an “early warning” report in the prescribed form (which must include disclosure of the purpose for the transaction, including plans or future intentions which the purchaser may have with respect to the target company). Note that the initial reporting threshold drops from 10% to 5% where there is already a bid in the market.

The third party could potentially continue purchasing securities up to the 20% level before being required to make a formal take-over bid, although it will be required to report any further acquisitions of 2% or more in a similar manner and, in practice, the stock price typically jumps when the press release is issued at 10%, making further purchases less attractive.

A prospective bidder contemplating the acquisition of a toe-hold will need to consider a range of potential legal and tactical implications, details of which are beyond the scope of this primer. Any accumulation of target company securities by a bidder in advance of a formal take-over bid should be done carefully to avoid the bidder inadvertently being caught by Canadian “pre-bid integration” rules. These rules provide that if a formal bid is launched and, during the 90 days preceding the bid the bidder acquired target securities in any transaction not generally available to all shareholders, then the consideration offered in the formal take-over bid must be at least equal to the highest consideration that was paid on a per share basis under any of the prior transactions.

A bidder will be contractually prohibited from purchasing securities of the target once it signs a confidentiality agreement that includes a standstill provision. Where the strategic decision is taken to acquire a toe-hold, it is usually done before the initial contact with the target company and the negotiation of a confidentiality agreement commences.

A public company that is worried about the possibility of a take-over bid, hostile or otherwise, will monitor trading in its securities for any unusual volume that may indicate that someone is assembling a toe-hold.

A potential purchaser that acquires over 10% of the target company in preparation for a formal take-over bid becomes an “insider” when the 10% threshold is exceeded. Insiders that make take-over offers or propose “related party transactions” can be subject to heightened disclosure and shareholder approval requirements.

获得立足点/预警

在加拿大，允许考虑进行要约收购的第三方，在不公布身份的情况下，从市场上购买目标公司高达9.99%发行在外的股份。同加拿大对比，美国的类似规定只允许收购方购买5%的股份。一旦第三方购买的股份跨越了10%的门槛，它就必须发布新闻消息并在两个工作日之内向加拿大证劵管理部门递交“早期警告”和内幕人报告（该报告必须包括披露交易的目的，包括收购方对目标公司所抱有的计划和未来的意图）。值得注意的是如果市场上已有人提出收购时，初始的报告门槛就从10%降低到5%。

在按要求进行正式出价收购之前，第三方可继续购买达到20%的股份，但每次收购如达到或超过2%，都须做类似上面的报告。事实上，发布收购达到10%的新闻消息后，股票价格通常会快速上涨，从而使继续购买的吸引力降低。

在正式进行要约收购前，收购方要考虑收购任何目标公司股份时须谨慎小心一系列潜在的法律战略影响，以免无意中触犯加拿大的“购前合并”规则。按照这些规则，如果要约收购正式展开，收购方在此前的90天内进行的任何交易中如购得其它所有目标公司股东一般买不到的目标公司的股份（包括在市场上和依据同目标公司股东们的私下协议），正式要约收购所给出的每股价格至少要与这些先前所有交易中所支付的最高股价相同。

一旦同目标公司签订了含有静止条款的保密协议，受之约束收购方不可购买目标公司的股份。取得立足点的战略决策一般是在同目标公司开始接触并商定签订保密协议之前制定的.

一家担忧有可能要面对恶意或其它形式的要约收购出现的上市公司会观察它的股份交易，注意是否有人在积累股份以获得立足点的异常股份交易额。为了开展正式要约收购而获得了超过百分之十的目标公司股份的潜在收购方，因为已经跨越了百分之十的门槛而转变成“内幕人”。内幕人进行要约收购或提出“相关方交易”时，在资料披露并得到股东同意方面会有对更高的要求。