UPDATE 2-Canada's M&A regime overhaul set to stymie hostile bids

Thu Mar 14, 2013 6:15pm EDT
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* Regulators unveil two separate proposals on poison pills

* Proposals now open to public comment for a 90 day period

* Proposals could dramatically alter Canadian M&A landscape

By Euan Rocha

TORONTO, March 14 (Reuters) - Canadian regulators unveiled proposals on Thursday that are set to overhaul the country's mergers and acquisitions regime and potentially make hostile corporate takeovers more difficult.

The two sets of proposals, laid out by provincial securities regulators, aim to bring more coherence to Canada's rules on the use of poison pills. They follow divergent rulings by some provincial regulators on the defensive gambits, which are widely used to fend off unwanted suitors.

The proposed rules on poison pills come a just day after the Canadian Securities Administrators (CSA), an umbrella group representing provincial authorities, outlined plans to lower the early warning reporting threshold, potentially reducing the odds of a stealth attack on a publicly-listed Canadian company.

The measures could go a long way in altering the mergers and acquisitions landscape in Canada, which has long been viewed as offering little protection to Canadian companies that are faced with hostile takeovers or stealth bids. The proposed rules will bring Canada's M&A regime more in line with U.S. regulations.

"This represents one of the most far-reaching debates about the acquisition of corporate control that we have had in this country in almost the last 50 years," said Richard Steinberg, who heads law firm Fasken Martineau's securities and mergers and acquisitions group.   Continued...