The Future of Poison Pills in Canada: Are Takeover Bid Reforms Needed?
The rules regarding shareholder rights plans, also known as “poison pills”, ensure that boards of directors facing a hostile takeover bid can retain a poison pill for a period of time in order to search for other potential offers. Over the years, the period of time has grown in length from twenty to...
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Veröffentlicht in: | McGill law journal 2015-09, Vol.61 (1), p.1-29 |
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Format: | Artikel |
Sprache: | eng |
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Zusammenfassung: | The rules regarding shareholder rights plans, also known as “poison pills”, ensure
that boards of directors facing a hostile takeover bid can retain a poison pill for a period
of time in order to search for other potential offers. Over the years, the period of time
has grown in length from twenty to thirty-five days and the Canadian Securities
Administrators (CSA) have recently proposed a 120-day period during which takeover bids
would remain open. In light of the historical rationale of takeover bid law to protect the
interests of target shareholders, this article argues that the legal regime should not allow
an extensive bid period of 120 days. While other aspects of the CSA proposal are sound, a
lengthy bid period disadvantages both target shareholders and bidders and will ultimately
deter bids from occurring. |
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ISSN: | 0024-9041 1920-6356 |
DOI: | 10.7202/1035384ar |