October 21, 2015
Canadian Oil Sands’ 120-day poison pill in response to an unsolicited bid from Suncor Energy has provoked speculation on how the Canadian Securities Administrators will respond in light of the fact that the 120-day timeframe that has been adopted is part of a draft takeover bid regime has not officially come into force yet. Partners and co-heads of our M&A Practice John Emanoilidis and Cornell Wright were sought by Lexpert for comment on developments amid this regulatory transition period. Below is an excerpt of the article.
“In support of its position, Suncor would argue that its original bid was a permitted bid that conformed with a poison pill that had been approved by shareholders,” says John Emanoilidis of Torys LLP in Toronto.
As it turns out, [Canadian Oil Sands’] strategy in this interim environment is not new to the market. Just a few weeks ago, after Total Energy Service Inc. announced its intention to make a takeover bid for Strad Energy Services Ltd. Strad responded by adopting a pill that required a takeover bid to remain open for 120 days to qualify as a permitted bid.
“Total decided not to go ahead because of the uncertainty over that length of time,” Emanoilidis said.
Suncor faces similar uncertainty.
“The interim period before implementation is always very tricky because regulators are loath to treat a proposal as if it had been implemented,” says Emanoilidis’ partner Cornell Wright. “Still, what the target did here is a smart tactical move that was entirely predictable.”
To read the full article, click here.
To read our latest analysis on Canada’s new “just say slow” bid regime, click here.