Poison Pills In Canada: Time To Pave A New Path Forward
|Area||Corporate Finance and Securities|
Article originally published in Corporate Governance Report, Volume 7 • Number 1
Excerpt from: "Poison Pills In Canada: Time To Pave A New Path Forward":
This article proposes a new regulatory framework for dealing with shareholder rights plans (“poison pills”) in Canada that aims to balance the competing interests of bidders, directors and shareholders. The central thesis of this article is that an effective legal regime governing poison pills must have two key elements (1) a corporation’s directors must have the legal tools necessary to act in accordance with their fiduciary obligations in dealing with unsolicited bids; and (2) shareholders should have reasonable protection to defend against management entrenchment and have a mechanism to tender their shares to a desirable take-over bid given that they are the ultimate owners of the corporation.