Home / Featured / The stage seems set for regulators to get out of ruling on shareholder rights plans
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The stage seems set for regulators to get out of ruling on shareholder rights plans

If Suncor succeeds in getting support from holders of two thirds of COS shares – one of its conditions — that takeover may be the last in Canada involving a poison pill hearing.

This Friday, Jan. 8, the day that Suncor’s hostile $4.3-billion all-stock offer for Canadian Oil Sands is set to expire, may end up being a milestone.

If Suncor succeeds in getting support from holders of two thirds of COS shares – one of its conditions — that takeover may be the last in Canada involving a poison pill hearing.

The reason: The expectation that proposed changes in the workings of takeover bids will be implemented this year. Those changes are expected to get the regulators out of the ruling on shareholder rights plans because targets will be able to take more time to respond to offers.

“Significant proposed changes to the takeover bid regime were published in March 2015 that would result in a 120-day permitted bid regime,” said a recent report from Oslers. “The new takeover bid regime, if implemented as currently proposed, will likely result in the end of shareholders rights plan hearings by regulators in most cases,” added the report, noting that other measures including mandatory minimum tender requirements and a 10-day extension of a bid following the satisfaction of all conditions.

Richard Fridman, a partner at Davies, said the proposed 120-day takeover period, “is a change in the paradigm by Canadian standards. You don’t envision securities administrators are going to be that sympathetic to rights plans’ hearings.”

Fridman said the 120-day takeover period is longer than the time normally taken to complete a takeover. “The view seems to be that if you can’t do it in 120 days then sorry. You have had your chance and your time.”

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