The Information Technology Association of Canada (ITAC), welcomes recommendations by the Canadian Securities Administrators to implement new defensive tactics policy proposals that will give boards of directors of publicly
-traded companies facing hostile bids more scope to appropriately manage the bids.
The amendments to the current take-over bid regime are designed to provide target boards of directors with additional time to respond to hostile bids while reserving for shareholders the ability to make voluntary and informed tender decisions.
“ITAC has been concerned about the lack of defense mechanisms available to Canadian technology companies facing take-over for some time,” said Karna Gupta, President and CEO of ITAC.
“The current regime provides very little recourse for the Board and management of a Canadian company to just say no to a hostile or disadvantageous take-over. We believe that this has contributed to the high rate of acquisitions of Canadian technology companies over the past decade. The measures recommended by the CSA will give companies much more room to manoeuver and do what’s best for their companies and their shareholders.”
The amendments proposed will require that take-over bids remain open for 120 days (a significant improvement over the current 50 days). Bids will also be subject to a mandatory majority minimum tender of all outstanding target securities. They will also be extended by the bidder for an additional 10 days once the minimum tender condition has been met and the bidder has announced its intention to take up and pay for the securities deposited under the bid.