OSC Intervenes in Tactical Private Placement Implemented During Proxy Contest
|Lawyer||Jonathan Feldman, Matthew Prager, Chris Sunstrum|
|Area||Corporate Finance and Securities|
Article originally published in LexisNexis' Corporate Governance Report: Vol.12, No.3, September 2017
Excerpt from "OSC Intervenes in Tactical Private Placement Implemented During Proxy Contest" (page 5):
On June 19, 2017, the Ontario Securities Commission (OSC) released its much anticipated reasons for its decision, In the Matter of Eco Oro Minerals Corp., in which the OSC overturned the decision of the Toronto Stock Exchange (TSX) to approve a private placement by Eco Oro Minerals Corp. (TSX: EOM) (Eco Oro) — without requiring prior approval of Eco Oro’s shareholders — in the midst of a proxy contest to replace the Eco Oro board. The OSC’s order is the latest in a series of recent decisions by Canadian securities regulators considering the validity of so-called “tactical” private placements implemented in hostile situations, and provides important guidance about the regulation of tactical private placements implemented during a proxy contest in particular, while also leaving a number of important questions unanswered.