Newspaper article The Canadian Press
Canadian Regulators Seek More Leeway for Boards Battling Hostile Takeovers
More potent poison pills for Canada?
TORONTO - Provincial security regulators are proposing a new set of rules for corporate Canada that would allow so-called poison pills aimed at preventing hostile takeovers to remain in place as long as they are supported by a majority of shareholders.
Under current rules, regulators generally suspend a shareholder rights plan after a limited time.
However, the Canadian Securities Administrators, the body representing regulators in the provinces and territories, said the changes would mean that regulators wouldn't intervene except under extraordinary circumstances.
The CSA said Thursday that the new proposed rules would allow a rights plan adopted by the board of a company to remain in place provided majority shareholder approval was obtained within a specified time.
Shareholders would also be able to terminate a plan at any time with a majority vote.
A typical shareholder rights plan gives a company's board the ability to issue additional stock, usually at a cheap price and with conditions that make a hostile takeover too expensive or financially poisonous. …