8 août 2012

« Rona battle highlights impotence of boards: Prof »

Entrevue avec Yvan Allaire | BNN

« Quebec-based home improvement retailer Rona Inc. (RON.TO 10.93 -0.08 -0.73%) has found itself in the crosshairs of an unsolicited takeover approach from its American rival Lowe’s Cos (LOW.N 45.14 0.51 1.14%) — even as Rona’s board and management have publicly stated they’re not interested.

For Yvan Allaire, Institute for Governance of Private and Public Organizations chair and professor at UQAM, the hostile takeover proposal highlights a glaring weakness in corporate Canada: powerless boards.

“Once the board in Canada says no to a transaction, it means almost nothing. If it were in the U.S. and the board says no to a would-be acquirer that would be the end of it,” he says. “We have in Canada situation when the board is virtually impotent when faced with hostile takeovers.”

He says that while shareholders “have rights… that doesn’t mean the board is without any power to use its business judgment when faced with a decision like this.”

“The question being raised by this Rona transaction…[is that] there are serious concerns in Canada that we are a totally free-for-all for transactions by foreign companies without any protection and without the board being able to evaluate this transaction because it’s essentially powerless. It is a Canadian problem.” »…

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