TORONTO (Reuters) - Canada's provincial securities regulators said on Thursday they have agreed to a unified approach for handling hostile takeover bids that would give the boards of target companies more time to respond and investors more say.
Under the proposals, hostile bidders would be able to buy shares only after a majority of outstanding shares not held by them had been tendered to the offer. Bidders would also have to keep the offer open for 10 days after announcing that requirement had been reached.
Any bids would have to remain open for at least 120 days unless waived by the target board.
Under current rules, a bidder has to wait only 35 days before buying shares tendered to its offer, and there is no requirement that a certain portion of holders agree before purchases can be made.
The changes will help investors make voluntary, informed and coordinated tender decisions, and give boards more time to respond to unwanted bids, the Canadian Securities Administrators said in a statement.
Boards have typically defended against unwanted bids by using so-called "poison pill" defenses to allow investors, excluding the hostile buyer, to buy discounted stock.
The CSA, an umbrella group representing the country's patchwork of regional watchdogs, said it had abandoned an earlier proposal on poison pills that had provoked a rival plan from Quebec's regulator.
Both sought to make it tougher for potential acquirers to buy Canadian companies, but the Quebec one also allowed a company's board to work against a takeover without shareholder consent.
While rules on poison pills will not be changed, the proposed regulations could reduce their use by giving target companies more time to weigh their options.
The CSA will publish the full details of the proposed changes in coming months, then consult with companies and the investment community before implementing the measures.
Editing by Jeffrey Hodgson. Editing by Andre Grenon