Unsolicited Take-Over Bid Defensive Measures

Further to our last blog post, below is an introduction of the shareholder rights plan used as a defensive measure against unsolicited take-over bids.

See Chinese version below [中文版参阅下文].

Shareholder Rights Plans

Until recently, a shareholder rights plan in Canada could be used to slow-down a hostile bidder so that the target board had more time to canvass alternatives that might maximize shareholder value. Unlike in the United States, they could not be used to delay a hostile bid indefinitely (the “just say no” defense). With the new rule that a hostile bid has to be open for at least 105 days (rather than merely 35 days under the old regime), the historical rationale for a shareholder rights plan in Canada no longer exists.

Shareholder rights plans remain a relevant tool for purposes of deterring creeping take-over bids.

As mentioned above, any purchase in the market that takes a shareholder above 20% ownership of the target company continues to require the bidder to make a formal take-over bid to all the target’s shareholders on identical terms, subject to two key exceptions to the formal take-over bid rules, namely the de minimis exception and the private agreement exception discussed above under “Take-Over Bids”. Many Canadian public companies have rights plans that prohibit the use of these two exemptions to acquire control of the company without offering an appropriate premium to all shareholders, and to prevent the acquisition of a negative control block which could deter a bid that the target board and other shareholders would find desirable. Whether or not a Canadian company should have a rights plan to prevent creeping bids will depend on a variety of factors, including the size of the company and the composition of its shareholder base.

股东权利计划

继我们上一篇博客, 以下将对股东权利计划作为恶意收购防护措施进行介绍。

直至最近，股东权利计划在加拿大可以用来减缓恶意收购，以使目标公司的董事会能够获得更多时间来采纳有可能将股东利益最大化的替代性方案。 与美国不同，它们不能用于无限期地阻挡恶意收购（“就说不”的办法）。根据新规则，恶意收购必须至少开放150天，加拿大股东权利计划的最初目的已经不再存在。

股东权利计划仍然是遏制渐进性要约收购的相关工具。

即其一例外就是微量援助（de minimis）豁免和其二例外的私下协议（private agreement）豁免。 许多加拿大上市公司拥有“权利计划”，该权利计划阻止利用这两项豁免条款在未提供适当溢价的情况下获得对公司的控制权，以及防止某一方得到负面控制权来阻碍目标公司收到其它股东认为满意的要约收购提案。加拿大公司是否应该具有一个权利计划来防止渐进性的要约收购，则取决于各种各样的因素，包括公司规模的大小和公司股东基础的构成。