Regulation of takeover bids in Ontario

• Main Author: Petrova, Elena V.
• Other Authors: Stevens, David (advisor)
• Format: Others
• Language: en
• Published: McGill University 2001
• Subjects: Tender offers (Securities) > Ontario.; Consolidation and merger of corporations > Law and legislation > Ontario.
• Online Access: http://digitool.Library.McGill.CA:80/R/?func=dbin-jump-full&object_id=33059

Takeovers play an important role in the economy as they serve to reallocate economic resources to more efficient uses and replace inefficient management. Unregulated takeover bids pose a threat to the interests of the target company shareholders. The legislature pays special attention to takeover bids to make sure that the bona fide interests of the target company shareholders are duly protected. This is the primary purpose of the takeover bid regulation in Ontario. The regulation is also aimed at ensuring the horizontal equity among target shareholders and the efficient functioning of the capital market. This thesis analyzes the present regulation of takeover bids in Ontario and argues that while the whole system of takeover bid regulation is consistent with the proclaimed purposes, there are two issues that fall out of the coherent structure. The restriction on free transferability of shares and the adoption by boards of directors of shareholder rights plans do not enhance the protection of target company shareholders and do not correspond to the proclaimed purposes.