February 25, 2014

Quebec’s tough anti-takeover talk is all to protect eight companies

Interview with Yvan Allaire | Financial Post

[…] «That may be true. As Yvan Allaire of Montreal’s Institute for Governance wrote in an opinion piece this week: “The legislative measures the working group is proposing are draconian.”

Among them: Allowing Quebec companies to adopt variable voting rights that could increase the longer shares are held (the aim being to keep the influence of what Caisse de dépôt boss Michael Sabia calls “investor tourists” lower than longer-term shareholders). The panel also proposes enshrining into Quebec law a number of provisions found in many U.S. states making a hostile deal less appealing to a potential acquirer. These include prohibiting the removal of directors before their term is up and prohibiting a hostile bidder from merging or selling assets representing 15% or more of the company for five years (the intention being to stop a bidder from financing a deal with the target’s assets).

The measures stretch past the power-enhancing steps for boards enacted in places such as Delaware, Mr. Allaire says, inching closer to the dissuasive regime in states like Pennsylvania, which aims to quash all the potential benefits from a non-friendly deal” … Read more