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	<title>IGOPPHead offices &#8211; IGOPP</title>
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		<title>‘It’s never only about the money’: Past deals hint at tactics for Cogeco’s suitors</title>
		<link>https://igopp.org/en/its-never-only-about-the-money-past-deals-hint-at-tactics-for-cogecos-suitors/</link>
		<comments>https://igopp.org/en/its-never-only-about-the-money-past-deals-hint-at-tactics-for-cogecos-suitors/#respond</comments>
		<pubDate>Fri, 11 Sep 2020 18:01:27 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
		<category><![CDATA[IGOPP in the medias]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Head offices]]></category>
		<category><![CDATA[Hostile takeovers]]></category>
		<category><![CDATA[Sièges sociaux]]></category>

		<guid isPermaLink="false">https://igopp.org/its-never-only-about-the-money-past-deals-hint-at-tactics-for-cogecos-suitors/</guid>
		<description><![CDATA[The move by Rogers Communications Inc. and Altice USA to launch a hostile takeover bid for Cogeco Communications Inc. and parent Cogeco Inc. without the support of the Quebec companies&#8217; controlling shareholder looks like a long-shot gamble to many experts. But they say similar past deals for family-controlled companies show there can be a path to victory [&#8230;]]]></description>
		<content><![CDATA[The move by Rogers Communications Inc. and Altice USA to launch a hostile takeover bid for Cogeco Communications Inc. and parent Cogeco Inc. without the support of the Quebec companies' controlling shareholder looks like a long-shot gamble to many experts. But they say similar past deals for family-controlled companies show there can be a path to victory for the would-be buyers.
The Audet family, who control both companies through their ownership of multiple-voting shares, quickly rejected the $10.3-billion offer, which would see Rogers take over Cogeco’s Canadian cable business and Altice acquire its U.S. operations. Executive chairman Louis Audet was adamant on Monday: The family’s shares are not for sale and that’s not a negotiating ploy.
The Audets' control over the dual-class share structure does give them final say, but merger and acquisition lawyers and principals who have sold family-controlled companies in the past say this is just the beginning. The buyers are now likely to deploy a range of strategies that could include discreet overtures to family members and appealing to Mr. Audet’s ego through the promise of future influence in the company or through tributes to his family’s legacy.
Going public with the offer was a “shot over the bow,” one expert says – it let the world know a deal is available, spiked Cogeco’s share price and gave minority shareholders something to think about.
“Often the only way to ensure that you have the support of other shareholders, or to raise the temperature on shareholders who may be blocking a transaction, is to raise the public profile,” says Walied Soliman, the Canadian chair of law firm Norton Rose Fulbright, who recently advised NordStar Capital LP on its winning bid for media company Torstar Corp.
“Even holders of dual-class shares have to be concerned about their reputations and bare-knuckle economics,” he says, pointing to the optics of shutting other shareholders out of a return on investment that might not come around again soon. “I think the approach [for a buyer] is to be patient, advance a thesis, get other shareholders on board and eventually it becomes very uncomfortable and difficult for a blocking shareholder not to proceed.”
Meanwhile, “soft issues” can be just as crucial as cash, Mr. Soliman says, noting that adherence to Torstar’s traditional progressive editorial values was of central importance to the five controlling families who sold to NordStar.
“It’s never only about money,” says Stephen Greenberg, a Montreal media executive whose family sold broadcaster Astral to Bell Canada in a $3.4-billion deal approved by regulators in 2013. “The Audets are looking at legacy. They’re looking at longevity. They’re looking at this as something that was started by their father and has grown exponentially over the years. Everything is wrapped up in these decisions: It’s personal, it’s business, it’s inter-family discussions. … It’s never one-dimensional.”
[...]
Poonam Puri, a law professor at York University’s Osgoode Hall Law School, says dual-class share structures present unique governance challenges for boards of directors: “The founding family typically controls the majority of the voting rights, but owns only a sliver of the total equity.”
The board must consider a formal bid “in good faith,” Ms. Puri says, which usually entails striking a special committee of independent directors to consider the offer. Ultimately though, the board may find its options are constrained. “The Audet family has the legal right to vote their shares according to their own interests, and as controlling shareholder, they have an effective veto over any proposed acquisition.”
Before Mr. Audet’s statement, Cogeco said the independent directors of both Cogeco and Cogeco Communications rejected the Rogers-Altice bid after board meetings and discussions with the family.
The courts and the “business judgment rule” have long protected the right of controlling shareholders to call the shots on a change of control. In a landmark 1998 ruling that helped establish the principle of deference to reasonable decisions by controlling shareholders, the Ontario Court of Appeal upheld a decision by the Schneider family to veto the sale of their meat-production company to Maple Leaf Foods in favour of a lower bid from a U.S. suitor (Maple Leaf eventually acquired Schneider Corp. from the U.S. buyer a few years later).
Pivoting toward a friendly deal that satisfies the Audet family is the only obvious way for Altice and Rogers to win Cogeco, says François Dauphin, CEO of the Montreal Institute for Governance of Private and Public Organizations. Winning the support of minority shareholders could also put pressure on the Audet family but they would still need to agree to sell, he said.
Institute staff recently dug through archival material and found a statement by the late Ted Rogers affirming that Rogers Communications would never make an offer for a company that was not for sale, Mr. Dauphin says. “That was 20 years ago. And he’s not there any more to explain to us what’s behind this whole tactic."
Read more [1]

[1] https://igopp.org/wp-content/uploads/2020/09/Nicolas-Van-Praet_Past-deals-hint-at-tactics-for-Cogeco’s-suitors_The-Globe-and-Mail_September-2020.pdf]]></content>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>BNN interview with the Chair of IGOPP, Dr. Yvan Allaire, on Cogeco unsolicited bid from Altice</title>
		<link>https://igopp.org/en/bnn-interview-with-the-chair-of-igopp-dr-yvan-allaire-on-cogeco-unsolicited-bid-from-altice/</link>
		<comments>https://igopp.org/en/bnn-interview-with-the-chair-of-igopp-dr-yvan-allaire-on-cogeco-unsolicited-bid-from-altice/#respond</comments>
		<pubDate>Thu, 03 Sep 2020 13:03:10 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
		<category><![CDATA[IGOPP in the medias]]></category>
		<category><![CDATA[Press Releases]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Head offices]]></category>
		<category><![CDATA[Sièges sociaux]]></category>

		<guid isPermaLink="false">https://igopp.org/the-audet-family-response-did-not-suggest-they-are-open-to-negotiate-institute-for-governance/</guid>
		<description><![CDATA[Chairman of the Institute for Governance Yvan Allaire says that the blunt response from Louis Audet suggests the family that owns Cogeco might not be open to negotiating a selling price. To access the interview with M. Allaire, please click here.]]></description>
		<content><![CDATA[Chairman of the Institute for Governance Yvan Allaire says that the blunt response from Louis Audet suggests the family that owns Cogeco might not be open to negotiating a selling price.

To access the interview with M. Allaire, please click here. [1]

 [2]

[1] https://www.bnnbloomberg.ca/technology/video/the-audet-family-response-did-not-suggest-they-are-open-to-negotiate-institute-for-governance~2027880
[2] https://www.bnnbloomberg.ca/technology/video/the-audet-family-response-did-not-suggest-they-are-open-to-negotiate-institute-for-governance~2027880]]></content>
		<wfw:commentRss>https://igopp.org/en/bnn-interview-with-the-chair-of-igopp-dr-yvan-allaire-on-cogeco-unsolicited-bid-from-altice/feed/</wfw:commentRss>
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		</item>
		<item>
		<title>Short-term thinking forcing companies to delay IPOs, opt for dual-class shares: Governance expert</title>
		<link>https://igopp.org/en/short-term-thinking-forcing-companies-to-delay-ipos-opt-for-dual-class-shares-governance-expert/</link>
		<comments>https://igopp.org/en/short-term-thinking-forcing-companies-to-delay-ipos-opt-for-dual-class-shares-governance-expert/#respond</comments>
		<pubDate>Tue, 14 May 2019 14:03:06 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
		<category><![CDATA[IGOPP in the medias]]></category>
		<category><![CDATA[Activism]]></category>
		<category><![CDATA[Chief Executive Officer]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Gouvernance créatrice de valeurs]]></category>
		<category><![CDATA[Head offices]]></category>
		<category><![CDATA[Hedge funds]]></category>
		<category><![CDATA[Value-creating governance]]></category>

		<guid isPermaLink="false">https://igopp.org/short-term-thinking-forcing-companies-to-delay-ipos-opt-for-dual-class-shares-governance-expert/</guid>
		<description><![CDATA[Yvan Allaire, executive chair at the Institute for Governance of Private and Public Organizations, joins BNN Bloomberg to discuss &#8220;quarterly capitalism&#8221; in light of WestJet CEO Ed Sims’ warning on the destruction it brings to long-term company plans. To watch this interview, please click here. &#160;]]></description>
		<content><![CDATA[Yvan Allaire, executive chair at the Institute for Governance of Private and Public Organizations, joins BNN Bloomberg to discuss "quarterly capitalism" in light of WestJet CEO Ed Sims’ warning on the destruction it brings to long-term company plans.

To watch this interview, please click here. [1]

&#160;

 [2]

[1] https://www.bnnbloomberg.ca/video/short-term-thinking-forcing-companies-to-delay-ipos-opt-for-dual-class-shares-governance-expert~1683258
[2] https://www.bnnbloomberg.ca/video/short-term-thinking-forcing-companies-to-delay-ipos-opt-for-dual-class-shares-governance-expert~1683258]]></content>
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		<slash:comments>0</slash:comments>
		</item>
		<item>
		<title>It Stays in the Family – Dual Voting Share Structures for Family Businesses</title>
		<link>https://igopp.org/en/it-stays-in-the-family-dual-voting-share-structures-for-family-businesses/</link>
		<comments>https://igopp.org/en/it-stays-in-the-family-dual-voting-share-structures-for-family-businesses/#respond</comments>
		<pubDate>Fri, 26 Apr 2019 19:24:15 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
		<category><![CDATA[IGOPP in the medias]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Head offices]]></category>
		<category><![CDATA[Hostile takeovers]]></category>

		<guid isPermaLink="false">https://igopp.org/it-stays-in-the-family-dual-voting-share-structures-for-family-businesses/</guid>
		<description><![CDATA[For many family businesses, control of long-term direction and management of the family corporation are key issues, particularly during times of growth or periods of succession. The Institute for Governance of Private and Public Organizations (“IGOPP”) recently published a new policy paper that should be of interest to family businesses and their advisors in planning the capital [&#8230;]]]></description>
		<content><![CDATA[For many family businesses, control of long-term direction and management of the family corporation are key issues, particularly during times of growth or periods of succession. The Institute for Governance of Private and Public Organizations (“IGOPP”) recently published a new policy paper that should be of interest to family businesses and their advisors in planning the capital structure for their enterprises: The Case for Dual-Class of Shares [1], Policy Paper No. 11 (2019). The paper revisits[1] [2] the state of dual-class public corporations in Canada, emphasizes their value to entrepreneurs, family businesses and Canadian society as a whole and makes a number of structuring recommendations, which are outlined below.

What is a Dual-Class Share Structure?

Canadian corporate statutes generally permit companies to adopt capital structures with multiple classes of shares with different rights or attributes (for example voting and non-voting shares or shares with preferential dividend, conversion or redemption rights). While the default approach is one vote per share, the flexibility of corporate laws permits the creation of several share classes with multiples votes, no voting rights or differential voting rights on certain matters (such as the election of the board of directors).[2] [3] In this context, IGOPP’s paper focuses on share structures with two classes, one of which is given multiple votes per share. Among publicly traded Canadian corporations with dual class structures, voting ratios can range from 1:0 (a class of voting shares and a class of non-voting shares) to 100:1 (a class of superior voting shares with 100 votes per share and a class of subordinate shares with one vote each). The central feature of a dual-class share structure is that ownership and control over the corporation can be decoupled. Or, to put it differently, a minority ownership position in the corporation’s equity may still hold the majority of the votes.

Benefits of a Dual Class Share Structure for Family Businesses

Dual-class share structures for public companies are controversial and the debate has been raging for a considerable time.[3] [4] The principal arguments against such structures are based on notions of shareholder democracy and protection of minority rights. Perhaps as a result, the number of publicly traded companies in Canada with a dual-class share structure has dropped from 100 in 2005 to 69 in 2018.[4] [5]

Nevertheless, the benefits of such structures identified by IGOPP and other commentators may be of particular interest to family-run businesses. Superior voting rights permit families to plan and manage their businesses in the long term and facilitate generational change, while, at the same time, being able to access outside investor capital to support the growth of the business. The dual-class structure affords protection against hostile take-overs and what IGOPP perceives as shareholder activism driven by short-term (and perhaps short-sighted) profit maximization. Or, as put by IGOPP: “… the coupling of dual-class and family ownership brings about longer survivorship, better integration the social fabric of host societies, less vulnerability to transient shareholders and more resistance to strategic and financial fashions.”[5] [6]

Recommended Features for a Dual Class Share Structure

In order to balance the advantages of a family controlled business, access to outside capital and the interests of minority shareholders, IGOPP recommends a number of features, including the following:

 	A voting ratio of 4:1 – This ratio retains a voting majority for family business at an ownership level above 20% and a blocking minority with respect to fundamental changes with an ownership interest of 11.1%. Reflecting research indicating that increasing variances between voting power and ownership level tends to negatively affect the quality of overall governance and favour self-interested, rather than business focused decision-making, this recommendation aims to balance legitimate family and overall business interests.
 	Minority Board Representation – One third of board members should be elected by the single-vote share class. This measure would give non-family investors a substantial indirect say in the management or supervision of the family business. To ensure continuity and compatibility with the family vision and values, IGOPP further proposes that minority directors be elected from a candidate pool nominated by the existing board.
 	“Coat Tail” Provisions – A major point of criticism of dual share structures has been price premium placed on multiple voting shares in case of a sale. The “uniquely Canadian” response to this issue is to treat all share classes equally on a sale.[6] [7] IGOPP’s recommendation that family corporations adopt such “coat tail” provisions in their articles or bylaws to guarantee that all shareholders can participate in a sale of the family business on the same terms and conditions at the same price, would thus overcome the “private benefit” concerns.
 	Dilution Sunset Clauses – In the context of dual share structures, a sunset clause would trigger the abolition of superior voting rights if the justification for their existence has fallen away. For family businesses, this would typically be the case when the business loses its essential character as a family enterprise. There is a wide range of possible triggers. Examples are time-based (e.g. 20 years after an IPO) or event-based (e.g. on the exit, retirement or death of the founder). However, these approaches typically do not meet the needs of a multi-generational family business. On the other hand, as family involvement the business may diminish over the years, a sunset clause could be tied to a level of family ownership interest. This notion is connected to the proposed voting ratio and its rationale. For example, at a 4:1 voting ratio, the dilution sunset could be triggered if and when the controlling shareholders’ equity dropped below the blocking minority of 11.1% – the point when self-interest may typically outweigh the overall business interests.

There are, of course, many possible variations and combinations on how these basic recommendations could be implemented to meet the specific goals and needs of each family business.

Read more [8]

[1] https://igopp.org/en/the-case-for-dual-class-of-shares-2/
[2] https://www.timelydisclosure.com/2019/04/26/it-stays-in-the-family-dual-voting-share-structures-for-family-businesses/?utm_medium=email&#38;utm_content=dIqiknd9G80BQLYX77DtrKCQ9wA-dsrRTlPg6KGsT1sySmo4nmY2bpsm8BZd3MdO#_ftn1
[3] https://www.timelydisclosure.com/2019/04/26/it-stays-in-the-family-dual-voting-share-structures-for-family-businesses/?utm_medium=email&#38;utm_content=dIqiknd9G80BQLYX77DtrKCQ9wA-dsrRTlPg6KGsT1sySmo4nmY2bpsm8BZd3MdO#_ftn2
[4] https://www.timelydisclosure.com/2019/04/26/it-stays-in-the-family-dual-voting-share-structures-for-family-businesses/?utm_medium=email&#38;utm_content=dIqiknd9G80BQLYX77DtrKCQ9wA-dsrRTlPg6KGsT1sySmo4nmY2bpsm8BZd3MdO#_ftn3
[5] https://www.timelydisclosure.com/2019/04/26/it-stays-in-the-family-dual-voting-share-structures-for-family-businesses/?utm_medium=email&#38;utm_content=dIqiknd9G80BQLYX77DtrKCQ9wA-dsrRTlPg6KGsT1sySmo4nmY2bpsm8BZd3MdO#_ftn4
[6] https://www.timelydisclosure.com/2019/04/26/it-stays-in-the-family-dual-voting-share-structures-for-family-businesses/?utm_medium=email&#38;utm_content=dIqiknd9G80BQLYX77DtrKCQ9wA-dsrRTlPg6KGsT1sySmo4nmY2bpsm8BZd3MdO#_ftn5
[7] https://www.timelydisclosure.com/2019/04/26/it-stays-in-the-family-dual-voting-share-structures-for-family-businesses/?utm_medium=email&#38;utm_content=dIqiknd9G80BQLYX77DtrKCQ9wA-dsrRTlPg6KGsT1sySmo4nmY2bpsm8BZd3MdO#_ftn6
[8] https://igopp.org/wp-content/uploads/2019/04/Fasken_Dual-Voting-Share-Structures-for-Family-Businesses_D.Ullrich_Avril-2019.pdf]]></content>
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		</item>
		<item>
		<title>Quebec budget includes $1-billion to keep head offices, like SNC-Lavalin’s, in the province</title>
		<link>https://igopp.org/en/quebec-budget-includes-1-billion-to-keep-head-offices-like-snc-lavalins-in-the-province/</link>
		<comments>https://igopp.org/en/quebec-budget-includes-1-billion-to-keep-head-offices-like-snc-lavalins-in-the-province/#respond</comments>
		<pubDate>Thu, 21 Mar 2019 22:57:26 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
		<category><![CDATA[IGOPP in the medias]]></category>
		<category><![CDATA[Actions multivotantes]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Head offices]]></category>
		<category><![CDATA[Hostile takeovers]]></category>
		<category><![CDATA[Offres d’achat hostiles]]></category>
		<category><![CDATA[Sièges sociaux]]></category>

		<guid isPermaLink="false">https://igopp.org/quebec-budget-includes-1-billion-to-keep-head-offices-like-snc-lavalins-in-the-province/</guid>
		<description><![CDATA[[ &#8230; ] The Quebec government has set aside $1-billion to encourage strategically important businesses to keep their head offices in the province, a measure Finance Minister Eric Girard says he could use to protect the Montreal executive suites of SNC-Lavalin Group Inc. Mr. Girard announced the measure Thursday in his Coalition Avenir Québec government’s [&#8230;]]]></description>
		<content><![CDATA[[ ... ]
The Quebec government has set aside $1-billion to encourage strategically important businesses to keep their head offices in the province, a measure Finance Minister Eric Girard says he could use to protect the Montreal executive suites of SNC-Lavalin Group Inc.
Mr. Girard announced the measure Thursday in his Coalition Avenir Québec government’s first budget, which hikes spending 4.7 per cent and relies heavily on increased federal transfers to keep a clean balance sheet.
The budget is light on details of how the government would execute the head-office plan. Budget documents say the government will strike a team “whose mandate will be to develop business intelligence in the field of head office protection.” Mr. Girard said details will be announced later by Economy Minister Pierre Fitzgibbon.
The retention of head offices has been a sensitive issue in Quebec since the 1970s, when companies fled the province amid a separatist movement and lagging economic prospects. Quebec independence is on the back burner, but the head-office issue reared up again after U.S. hardware giant Lowe’s Companies Inc. made a surprise bid for Quebec-based Rona Inc. and troubles mounted for SNC-Lavalin, the engineering giant facing corporate fraud and bribery charges after years of international scandal.
If convicted, Ottawa could ban the company from bidding on federal projects for 10 years. A ban in Canada would force the company to seek more work outside the country and throw into question its commitment to maintaining its headquarters in Montreal.

[ ... ]

Montreal’s Institute for Governance published a list in 2016 of 16 Quebec-based companies with more than $1-billion in revenue having no protection against hostile takeovers. Some of the companies on that list are almost certainly on Quebec’s current list of strategic firms, including grocer Metro Inc., aerospace training firm CAE Inc. and engineering company WSP Global Inc., said Yvan Allaire, executive chairman of the institute. Other companies that are integral to the economy likely include Alimentation Couche-Tard Inc., Bombardier Inc. and CGI Inc., which all have dual class shares as defences.

 Read more [1]

[1] https://igopp.org/wp-content/uploads/2019/03/Quebec-budget-includes-1-billion-to-keep-head-offices-like-SNC-Lavalin’s-in-the-province-The-Globe-and-Mail_March-2019.pdf]]></content>
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		</item>
		<item>
		<title>Why Quebec sees SNC-Lavalin as an asset, not a liability</title>
		<link>https://igopp.org/en/why-quebec-sees-snc-lavalin-as-an-asset-not-a-liability/</link>
		<comments>https://igopp.org/en/why-quebec-sees-snc-lavalin-as-an-asset-not-a-liability/#respond</comments>
		<pubDate>Thu, 14 Feb 2019 18:44:16 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
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		<category><![CDATA[Hostile takeovers]]></category>
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		<guid isPermaLink="false">https://igopp.org/why-quebec-sees-snc-lavalin-as-an-asset-not-a-liability/</guid>
		<description><![CDATA[In Ottawa, there appears to be little sympathy these days for SNC-Lavalin, the giant engineering corporation facing prosecution for bribery schemes in Libya. The company was hoping to strike a deal with federal prosecutors in order to avoid a trial. If guilty, it would be cut off from lucrative Canadian government contracts for a decade. [&#8230;]]]></description>
		<content><![CDATA[In Ottawa, there appears to be little sympathy these days for SNC-Lavalin, the giant engineering corporation facing prosecution for bribery schemes in Libya.

The company was hoping to strike a deal with federal prosecutors in order to avoid a trial. If guilty, it would be cut off from lucrative Canadian government contracts for a decade.

But since it was alleged last week that the Prime Minister's Office had pressured then attorney general Jody Wilson-Raybould [1] to allow SNC-Lavalin to sidestep prosecution, few federal politicians have been willing to stick their necks out for the company.

In Quebec, however, where it has operated for more than 100 years, SNC-Lavalin has a chorus of defenders that include the premier, the Opposition and pundits.

[ ... ]

Too big to fail?

Once the undisputed king of the province's engineering firms, SNC was overtaken in market capitalization last year by Montreal rival WSP.

The company's involvement in a number of corruption cases has been the longest-running cause for its loss of lustre.

"The reputation of SNC-Lavalin is much weaker today than it was 10 years ago because of the poor policies of its board [of directors]," said Michel Nadeau, head of the Institute of Governance.
Along with the allegations of bribery in Libya, SNC executives were implicated in a 2009 bid-rigging scheme to build a Montreal hospital [2].
The company is also serving a 10-year ban on World Bank contracts for its involvement in corruption in Bangladesh.

And the RCMP is currently investigating [3] the possibility executives were aware of bribes paid between 2001 and 2003 to secure a $127 million contract to refurbish the Jacques Cartier Bridge in Montreal.

But Nadeau said the company has moved on since then under the leadership of current CEO Neil Bruce and a new board that is more committed to governance oversight.

He said he was puzzled at the unwillingness of federal prosecutors to use the deferred prosecution agreement, which would have allowed SNC to pay a fine in exchange for avoiding a trial.


 'When you have that critical mass you should be able to weather storms,' Economy Minister Pierre Fitzgibbon said when asked if SNC-Lavalin was too big to fail. (Jacques Boissinot/Canadian Press)


"Many countries in the world have these types of agreements for companies involved in foreign bribery," said Nadeau, a former executive at the Caisse de dépôt.

"Unfortunately, the corporation is being punished, and it is its 50,000 employees — many of them Canadians — who are being penalized."

Read more [4]

[1] https://www.cbc.ca/news/politics/jody-wilson-raybould-timeline-1.5016755
[2] https://www.cbc.ca/news/canada/montreal/pierre-duhaime-snc-lavalin-1.5000518
[3] https://www.cbc.ca/news/canada/montreal/snc-lavalin-still-under-investigation-from-rcmp-in-quebec-1.5016315
[4] https://igopp.org/wp-content/uploads/2019/02/Why-Quebec-sees-SNC-Lavalin-as-an-asset-not-a-liability-_-CBC-News_Février-2019.pdf]]></content>
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		<title>&#8216;It’s sad&#8217; no one asked questions while SNC profits soared: Ex-Caisse exec</title>
		<link>https://igopp.org/en/its-sad-no-one-asked-questions-while-snc-profits-soared/</link>
		<comments>https://igopp.org/en/its-sad-no-one-asked-questions-while-snc-profits-soared/#respond</comments>
		<pubDate>Thu, 14 Feb 2019 16:19:39 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
		<category><![CDATA[IGOPP in the medias]]></category>
		<category><![CDATA[Ethics]]></category>
		<category><![CDATA[Éthique]]></category>
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		<guid isPermaLink="false">https://igopp.org/its-sad-no-one-asked-questions-while-snc-profits-soared/</guid>
		<description><![CDATA[The long series of scandals ensnaring SNC-Lavalin Group Inc.  has one former executive of the Caisse de dépôt et placement du Québec calling for more accountability when it comes to corporate bribes for global contracts. Michel Nadeau, a former deputy chief executive of Caisse – the largest shareholder in SNC – told BNN Bloomberg on [&#8230;]]]></description>
		<content><![CDATA[The long series of scandals ensnaring SNC-Lavalin Group Inc.  has one former executive of the Caisse de dépôt et placement du Québec calling for more accountability when it comes to corporate bribes for global contracts.

Michel Nadeau, a former deputy chief executive of Caisse – the largest shareholder in SNC – told BNN Bloomberg on Wednesday that when he left his role in 2003, the Quebec pension fund was not aware of any corruption or fraud activity related to SNC’s construction projects in Libya at the time.

Nadeau noted that under former SNC chief executive Pierre Duhaime, who pleaded guilty Feb. 1 for his role in a bribery scandal [1] around the construction of a Montreal hospital, the company’s average profit rose substantially.

“When you double your profits, shareholders, directors – they will never ask, ‘Why are you doubling the profits? What is the secret?’” said Nadeau, now executive manager with the Institute for Governance of Private and Public Organizations in Montreal.

“It’s because you have contracts which are much more profitable than your usual activity. Nobody is raising questions on how you’re making much more profits. And it’s sad, but we should be aware.”

SNC’s average profit from 2006 to 2008, three years prior to Duhaime becoming president and CEO in 2009, was $208 million. Between 2009 to 2011, with Duhaime at the helm, the company’s average annual profit nearly doubled to $404.95 million.

In February 2015, SNC and two of its subsidiaries were charged with paying nearly $48 million to public officials in Libya between 2001 and 2011 to influence government decisions. The RCMP has also charged the company, its construction division and a subsidiary with one charge each of fraud and corruption for allegedly defrauding various Libyan organizations of roughly $130 million. If found guilty, SNC could be barred from bidding on federal contracts for a decade.

Nadeau added that SNC’s past practices followed many other large engineering firms that pay bribes, which has led some Canadian companies like WSP Global Inc. to focus its business in developed countries.

“Unfortunately, it is a reality,” he said.  “I think if you look at large French, German, American corporations, you have to do this if you want to have access to contracts.”

“So that’s why if you want to go into emerging countries, unfortunately in some of them – not all of them – you have to give bribes.”

To access this interview, please click here. [2]

[1] https://www.bnnbloomberg.ca/former-snc-lavalin-ceo-pierre-duhaime-pleads-guilty-in-bribery-case-1.1207899
[2] https://www.bnnbloomberg.ca/it-s-sad-no-one-asked-questions-while-snc-profits-soared-ex-caisse-exec-1.1214272]]></content>
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		<title>Quebec takes aim at foreign takeovers with new watchdog group</title>
		<link>https://igopp.org/en/quebec-takes-aim-at-foreign-takeovers-with-new-watchdog-group/</link>
		<comments>https://igopp.org/en/quebec-takes-aim-at-foreign-takeovers-with-new-watchdog-group/#respond</comments>
		<pubDate>Tue, 21 Feb 2017 17:13:17 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
		<category><![CDATA[IGOPP in the medias]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Head offices]]></category>
		<category><![CDATA[Hostile takeovers]]></category>
		<category><![CDATA[Regulation]]></category>

		<guid isPermaLink="false">https://igopp.org/?p=7264</guid>
		<description><![CDATA[In the wake of several high-profile takeovers of Quebec companies, such as Rona Inc. and Cirque du Soleil, the provincial government is implementing new measures aimed at promoting the growth of local businesses while maintaining corporate head offices in the province. Premier Philippe Couillard’s government said Tuesday it would set up a watchdog group to [&#8230;]]]></description>
		<content><![CDATA[In the wake of several high-profile takeovers of Quebec companies, such as Rona Inc. and Cirque du Soleil, the provincial government is implementing new measures aimed at promoting the growth of local businesses while maintaining corporate head offices in the province.
Premier Philippe Couillard’s government said Tuesday it would set up a watchdog group to monitor the risks of Quebec-based companies being subject to a sale or hostile takeover offer as well as advise the government on the capital needs of local companies as they grow. It also said Investment Quebec, the government’s investment arm, would step up efforts to educate business owners about the merits of dual-class share structures as a way to fend off unwanted suitors.
[ ... ]
Sixteen of the 69 largest Quebec corporations have no protection against a hostile takeover bid, Montreal’s Institute for Governance of Private and Public Organizations said in a 2016 report. They include grocer Metro Inc., T-shirt maker Gildan Activewear Inc. and retailer Dollarama Inc. A proposal by some observers that the government should push financial institutions to create a fund to purchase blocking stock positions before any hostile bid has materialized is not particularly appealing, the institute said. Read more [1]

[1] http://www.theglobeandmail.com/report-on-business/quebec-takes-aim-at-foreign-takeovers-with-new-watchdog-group/article34104487/?utm_medium=email&#38;utm_content=oyfyBiSHsVomjLjQ1_lkMg]]></content>
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		<item>
		<title>IGOPP is publishing a research study on corporate head offices located in Quebec</title>
		<link>https://igopp.org/en/igopp-is-publishing-a-research-study-on-corporate-head-offices-located-in-quebec/</link>
		<comments>https://igopp.org/en/igopp-is-publishing-a-research-study-on-corporate-head-offices-located-in-quebec/#respond</comments>
		<pubDate>Thu, 29 Sep 2016 17:09:15 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[Press Releases]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Head offices]]></category>
		<category><![CDATA[Hostile takeovers]]></category>
		<category><![CDATA[Stakeholders]]></category>

		<guid isPermaLink="false">https://igopp.org/?p=6523</guid>
		<description><![CDATA[More than six months after the fact, the sale of Rona to Lowe’s, a U.S. corporation, continues to generate political controversy. This raises the question: how many large Quebec corporations are vulnerable to a foreign takeover with the consequent loss, sooner or later, of the strategic functions associated with their head offices. Such a takeover [&#8230;]]]></description>
		<content><![CDATA[More than six months after the fact, the sale of Rona to Lowe’s, a U.S. corporation, continues to generate political controversy. This raises the question: how many large Quebec corporations are vulnerable to a foreign takeover with the consequent loss, sooner or later, of the strategic functions associated with their head offices. Such a takeover can take a so-called "hostile" or "friendly" form, depending on whether the management of the targeted company is in favour of or opposed to the transaction.

The Institute for Governance (IGOPP) is today publishing a research study, prepared by its Executive Chair, Dr. Yvan Allaire, and Director of Research, François Dauphin, which takes as its starting point the list of the FP500 (the largest Canadian corporations based on their revenues in 2015), and which defines firms as "large" where they post revenues of more than $1 billion. In 2015, some 69 firms with headquarters in Quebec qualified as "large" corporations. Of these, 45 were business corporations, of which 21 had a "controlling" shareholder or shareholders, and 24 were publicly held corporations with a dispersed share ownership.

At the end of the day, only 16 of the 69 largest Quebec corporations have no protection against a hostile takeover bid.

We conclude that the risk of losing head offices located in Quebec, while real, does not primarily stem from hostile takeovers by firms outside Quebec. Friendly transactions represent a greater risk in the current context. Finally, a market economy inevitably leads to the disappearance of companies from the group of so-called "large corporations". What is important is Quebec's entrepreneurial spirit and its ability to renew the stock of large corporations with decision-making centers in Quebec.

The report contains three specific recommendations. Read more [1]

[1] https://igopp.org/wp-content/uploads/2016/09/IGOPP_Rapport_SiegesSociaux_EN_v3_WEB-a.pdf]]></content>
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		</item>
		<item>
		<title>What’s the risk of losing a significant number of corporate head offices now located in Quebec?</title>
		<link>https://igopp.org/en/les-sieges-sociaux-des-grandes-entreprises-du-quebec-sont-ils-en-peril/</link>
		<comments>https://igopp.org/en/les-sieges-sociaux-des-grandes-entreprises-du-quebec-sont-ils-en-peril/#respond</comments>
		<pubDate>Thu, 29 Sep 2016 16:48:04 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[Reports & Studies]]></category>
		<category><![CDATA[Head offices]]></category>
		<category><![CDATA[Hostile takeovers]]></category>
		<category><![CDATA[Regulation]]></category>
		<category><![CDATA[Stakeholders]]></category>

		<guid isPermaLink="false">https://igopp.org/les-sieges-sociaux-des-grandes-entreprises-du-quebec-sont-ils-en-peril-2/</guid>
		<description><![CDATA[More than six months after the fact, the sale of Rona to Lowe’s, a U.S. corporation, continues to generate political controversy. Lowe’s’ first attempt to acquire Rona in 2012 turned more or less hostile in nature, sparking a strong reaction from the Quebec government at the time. The government ordered the financial institutions under its [&#8230;]]]></description>
		<content><![CDATA[More than six months after the fact, the sale of Rona to Lowe’s, a U.S. corporation, continues to generate political controversy. Lowe’s’ first attempt to acquire Rona in 2012 turned more or less hostile in nature, sparking a strong reaction from the Quebec government at the time. The government ordered the financial institutions under its control (Investissement Québec) and pressured those under its influence (the Caisse de dépôt et placement and the Fonds de solidarité de la FTQ) to take up a blocking position in Rona’s shareholdings, which was done to keep the head office in Quebec.

At the time, Lowe’s withdrew from the transaction. But negotiations resumed in 2015, to achieve this time around a “friendly” transaction. Rona’s board of directors eventually approved the sale of the company to Lowe’s, without the Quebec government voicing any objections to the gradual disappearance of Rona’s head office.

Whether as a result of a hostile or friendly process, how many large Quebec corporations are vulnerable to a foreign takeover with the consequent loss, sooner or later, of the strategic functions associated with their head offices?

Read more [1]

Opinions expressed in this paper are the authors’ alone.

[1] https://igopp.org/wp-content/uploads/2016/09/IGOPP_Rapport_SiegesSociaux_EN_v3_WEB-a.pdf]]></content>
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