Tag: Canada


2015 Canadian Hostile Take-Over Bid Study

The following post comes to us from Fasken Martineau DuMoulin LLP and is based on the executive summary of a Fasken Martineau study by Aaron J. Atkinson and Bradley A. Freelan, partners in the Mergers & Acquisitions practice at Fasken Martineau DuMoulin LLP. The complete publication is available here.

The following post comes to us from Fasken Martineau DuMoulin LLP and is based on the executive summary of a Fasken Martineau study by Aaron J. Atkinson and Bradley A. Freelan, partners in the Mergers & Acquisitions practice at Fasken Martineau DuMoulin LLP. The complete publication is available here.

In Canada, there are numerous ways to acquire a public company; however, a take-over bid made directly to shareholders is the only means by which legal control can be acquired without the consent of the target board. Such an unsolicited (or “hostile”) bid is often used to bypass the board and present an offer directly to shareholders after discussions with the target board have failed, thereby putting the target company “in play”.

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Beyond Term Limits: Using Performance Management to Guide Board Renewal

The following post comes to us from Stan Magidson, President and CEO of the Institute of Corporate Directors and Chair of the Global Network of Directors Institutes. This post is based on portions of an ICD publication titled Beyond Term Limits: Using Performance Management to Guide Board Renewal; the complete survey is available here.

The following post comes to us from Stan Magidson, President and CEO of the Institute of Corporate Directors and Chair of the Global Network of Directors Institutes. This post is based on portions of an ICD publication titled Beyond Term Limits: Using Performance Management to Guide Board Renewal; the complete survey is available here.

The debate over board renewal is moving into sharper focus in Canada. New public company disclosure requirements demand greater transparency on such things as term limits and other renewal mechanisms, and some large investors are sending the implicit message that companies must renew the board or they will seek to do it instead. The ICD agrees that the composition and renewal of the board are vital processes that demand rigour and analysis and are best undertaken by the board pro-actively.

In the paper Beyond Term Limits: Using Performance Management to Guide Board Renewal we seek to provide a framework for boards to build a renewal process that increases accountability and achieves the right mix of skills and experience to create long-term effectiveness.

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ISS Releases 2015 Benchmark Policy Updates

Carol Bowie is Head of Americas Research at Institutional Shareholder Services Inc. (ISS). This post relates to ISS global benchmark voting policy guidelines for 2015.

Carol Bowie is Head of Americas Research at Institutional Shareholder Services Inc. (ISS). This post relates to ISS global benchmark voting policy guidelines for 2015.

ISS recently issued updated guidelines for several of its benchmark global voting policies, which will be effective for analyses of publicly traded companies with shareholder meetings on or after Feb. 1, 2015. For the 10th year running, ISS gathered broad input from institutional investors, corporate issuers, and other market constituents worldwide as a key part of its policy development process. The 2015 updates reflect the time and effort of hundreds of investors, issuers, corporate directors, and other market participants who provided input through a variety of channels, including ISS’ annual policy survey, topical and regional roundtables, and direct engagements with staff.

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Canadian Court Takes Hybrid Approach to Poison Pill

The following post comes to us from Berl Nadler, partner at Davies, Ward, Phillips & Vineberg LLP, and is based on a Davies publication by Kevin J. Thomson, Peter Hong, and Gilles R. Comeau.

The following post comes to us from Berl Nadler, partner at Davies, Ward, Phillips & Vineberg LLP, and is based on a Davies publication by Kevin J. Thomson, Peter Hong, and Gilles R. Comeau.

On May 2, 2014, the British Columbia Securities Commission (the “BCSC”) determined to allow the shareholder rights plan of Augusta Resource Corporation (“Augusta”) to remain in effect for at least 156 days after the announcement of the unsolicited offer by HudBay Minerals Inc. (“HudBay”) to acquire the shares of Augusta. The BCSC order was issued at a hearing held shortly after the continuance of the rights plan was approved by the shareholders of Augusta.

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Shareholder Value Enhanced Through Sufficient Time to Generate Alternative Transaction

The following post comes to us from Berl Nadler, partner at Davies, Ward, Phillips & Vineberg LLP, and is based on a Davies publication by Kevin J. Thomson and Peter Hong.

The following post comes to us from Berl Nadler, partner at Davies, Ward, Phillips & Vineberg LLP, and is based on a Davies publication by Kevin J. Thomson and Peter Hong.

On April 2, 2014, Osisko Mining Corporation announced a superior alternative to Goldcorp Inc.’s unsolicited offer for Osisko in the form of a partnership with Yamana Gold Inc. resulting in Osisko’s shareholders receiving cash and share consideration with an implied value representing a 22% premium to Goldcorp’s offer. This transaction was announced 79 days after Goldcorp announced its intention to launch its unsolicited offer.

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Majority Voting Finally Arrives in Canada

The following post comes to us from Stephen Erlichman, securities law partner at Canadian law firm Fasken Martineau and Executive Director at the Canadian Coalition for Good Governance, a nonprofit corporation whose members are most of the largest pension funds, mutual fund managers and other money managers across Canada.

The following post comes to us from Stephen Erlichman, securities law partner at Canadian law firm Fasken Martineau and Executive Director at the Canadian Coalition for Good Governance, a nonprofit corporation whose members are most of the largest pension funds, mutual fund managers and other money managers across Canada.

Thursday February 13, 2014 was an important day for shareholder democracy in Canada. We know that athletes train many years in order to reach the Olympics, but the Canadian Coalition for Good Governance (CCGG) also has worked publicly and behind the scenes for many years to bring majority voting to Canada. Finally, last week the Toronto Stock Exchange (TSX) agreed to adopt a listing requirement effective June 30, 2014 pursuant to which TSX listed companies (other than those which are majority controlled) must adopt a majority voting policy which requires each director of a TSX listed issuer to be elected by a majority of the votes cast with respect to his or her election other than at contested meetings.

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Canadian Governance Insights from 2013

The following post comes to us from Berl Nadler, partner at Davies, Ward, Phillips & Vineberg LLP, and is based on the executive summary of a Davies publication, titled “Governance Insights 2013,” available here.

The following post comes to us from Berl Nadler, partner at Davies, Ward, Phillips & Vineberg LLP, and is based on the executive summary of a Davies publication, titled “Governance Insights 2013,” available here.

This third annual edition of Governance Insights presents Davies’ analysis of the corporate governance practices of Canadian public companies over the course of 2013 and the trends and issues that influenced and shaped them.

We expect 2014 to be an active year for governance themes with greater calls for diversity on boards, a growing shareholder voice on “say on pay” resolutions, and further regulatory initiatives around proxy voting and the regulation of proxy advisory firms. We also anticipate continued discussion on shareholder activism and scrutiny of the tools and strategies used by issuers and shareholders.

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Developments Regarding Gender Diversity on Public Boards

David A. Katz is a partner at Wachtell, Lipton, Rosen & Katz specializing in the areas of mergers and acquisitions and complex securities transactions. This post is based on an article by Mr. Katz and Laura A. McIntosh that first appeared in the New York Law Journal; the full article, including footnotes, is available here.

David A. Katz is a partner at Wachtell, Lipton, Rosen & Katz specializing in the areas of mergers and acquisitions and complex securities transactions. This post is based on an article by Mr. Katz and Laura A. McIntosh that first appeared in the New York Law Journal; the full article, including footnotes, is available here.

While the number of women directors on U.S. public company boards has not risen dramatically since 2012, the issue of gender diversity on boards continued to gain momentum and global prominence over the last 12 months. Since we last discussed this issue, new legislative and non-governmental initiatives around the world have resulted in growing numbers of women directors and greater shareholder focus on board diversity and related disclosures. This issue is likely to become increasingly significant in 2014 and beyond, both in the United States and abroad.

EU Developments

Earlier this month, the European Commission moved a step closer to imposing a form of gender quota on major public companies in the European Union. Two committees of the European Parliament voted in favor of a proposal by the European Commission to require certain public companies to increase the representation of women on their boards. The proposed law applies only to large public companies, with no exceptions even for companies in which women compose less than 10 percent of the workforce, and, if adopted, provides for obligatory sanctions for failure to follow the proposed requirements.

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Investor Organizations Oppose Tightening of Canadian Disclosure Regime

The following post comes to us from Alex Moore, partner at Davies, Ward, Phillips & Vineberg LLP, and discusses an MFA and AIMA joint comment letter submitted with the Canadian Securities Administrators. The comment letter is available here.

The following post comes to us from Alex Moore, partner at Davies, Ward, Phillips & Vineberg LLP, and discusses an MFA and AIMA joint comment letter submitted with the Canadian Securities Administrators. The comment letter is available here.

The Managed Funds Association (“MFA”) and the Alternative Investment Management Association (“AIMA”) and have jointly submitted a comment letter with the Canadian Securities Administrators with respect to proposed changes to Canada’s block shareholder reporting regimes known in Canada as the Early Warning Reporting (“EWR”) system and the Alternative Monthly Reporting (“AMR”) system. The EWR and AMR systems are the Canadian equivalents to Schedule 13(d) and 13(g) disclosure in the United States.

The comment letter provides an extensive discussion of the importance of shareholder engagement and activist investing and the consequential benefits from such activity that accrue to all shareholders, as well as to target companies and the economy more generally. The letter submits that the CSA’s proposed tightening of Canada’s block shareholder reporting rules will stifle shareholder engagement and democracy and insulate incumbent managers from owners. The full text of the MFA and AIMA comment letter is available here: http://www.osc.gov.on.ca/documents/en/Securities-Category6-Comments/com_20130712_62-104_kaswellsj.pdf.

The changes to the EWR and AMRS regimes proposed by the CSA include:

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Emerging Themes in Canadian Fiduciary Law for Pension Trustees

The following post comes to us from Edward J. Waitzer, partner at Stikeman Elliott LLP in Toronto and director of the Hennick Centre for Business and Law at York University. The post is based on a research by Mr. Waitzer and Douglas Sarro that received the 2013 IRRC Research Award.

The following post comes to us from Edward J. Waitzer, partner at Stikeman Elliott LLP in Toronto and director of the Hennick Centre for Business and Law at York University. The post is based on a research by Mr. Waitzer and Douglas Sarro that received the 2013 IRRC Research Award.

As society increasingly faces governance challenges at all levels, there is a growing recognition of the need to take a longer term and more systemic view. Given the overwhelming incentives for myopic leadership (and action), our common law system—where courts respond to specific fact situations—may play a critical role. One avenue is likely through the concept of fiduciary duty—the legal obligation to act in the best interests of others.

The Supreme Court of Canada has been at the leading edge in developing a coherent view of the nature of fiduciary relationships and their consequences (largely through its recognition of a new class of fiduciary relationship between the Crown and Aboriginal peoples). The logic has permeated more broadly, with the Court focusing on the high degree of specialization and interdependence in society—where we increasingly rely on the services and expertise of strangers. This rise of “fiduciary society” is a classic non-zero-sum game, where we can all benefit but, if trust is eroded, the game fails (and everyone loses). Hence it is that values of trust and loyalty, shaped by “reasonable expectations”, have come to form the basis for the court’s broad standards.

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