CANADIAN SECURITIES ADMINISTRATORS NOTICE 62-301
Implementation of the Zimmerman Amendments
Governing the Conduct of Take-over and Issuer Bids
Amendments governing the conduct of take-over bids and issuer bids under
securities legislation (colloquially known as the "Zimmerman Amendments")
are intended to come into effect on March 31, 2001.
Background
On May 13, 1996 a committee of the Investment Dealers
Association of Canada (the "Zimmerman Committee") commissioned
to review take-over and issuer bid time limits issued its report setting
out 14 recommendations. The Zimmerman Committee recommended, among other
things, lengthening the minimum bid time periods to permit the target
company and its shareholders more time to consider the bid and to seek
other offers as well as giving offerors the option of commencing a take-over
bid by way of advertisement.
The Canadian Securities Administrators (the "CSA")
agreed to adopt the recommendations and established a committee to develop
uniform wording for amendments in the eight jurisdictions with take-over
and issuer bid provisions in their securities legislation. The committee
completed its work in late 1997 and the first legislative amendments were
passed in Alberta and British Columbia in 1998. The Zimmerman Amendments
were subsequently passed in Ontario and Saskatchewan in 1999 and are either
under consideration (in Quebec) or awaiting introduction in the other
jurisdictions (Manitoba, Nova Scotia and Newfoundland).
The full text of the Zimmerman Amendments and consequential
rule amendments in the case of British Columbia and Alberta, were published
and can be found on the following websites:
British Columbia Securities Commission: www.bcsc.bc.ca
Alberta Securities Commission: www.albertasecurities.com
Saskatchewan Securities Commission:
www.sfsc.gov.sk.ca/ssc/rules
Ontario Securities Commission:
www.osc.gov.on.ca
Implementation
The British Columbia, Alberta, Saskatchewan and Ontario
Securities Commissions have asked their respective governments to proclaim
the Zimmerman Amendments so that they come into effect March 31, 2001.
The Manitoba, Nova Scotia and Newfoundland Securities
Commissions intend to implement the Zimmerman Amendments by way of blanket
order as an interim measure pending passage of the necessary legislative
amendments to implement the Zimmerman Amendments in each of the jurisdictions.
Interested parties should refer to the following websites
for the full text of the particular blanket order:
Manitoba Securities Commission: www.msc.gov.mb.ca
Nova Scotia Securities Commission: www.gov.ns.ca/nssc/
Newfoundland Securities Commission:
www.nf.ca/gsl/cca/s/
The Commission des valeurs mobilières du Québec (the
"CVMQ") is not in a position to implement the Zimmerman Amendments
until such time as the legislative amendments necessary to implement the
Zimmerman Amendments in Quebec have been passed. Interested parties should
consult the CVMQ website (www.cvmq.com)
for the CVMQ Notice on the status of the Zimmerman Amendments in Quebec.
In the event that the legislative amendments necessary
to implement the Zimmerman Amendments in Quebec are not proclaimed by
March 31, 2001, two take-over/issuer bid regimes will exist in Canada.
Therefore, if a bid involves offeree shareholders resident in both Quebec
and a jurisdiction that has implemented the Zimmerman Amendments, it will
be necessary for bidders and targets to comply with both regimes.
Wherever differences between the regimes exist, the more
onerous rules must be complied with. For example:
-
A bid that is commenced by the delivery of the
bid to security holders must, if made in both Quebec and a Zimmerman
jurisdiction, allow at least 35 days from the date of the bid during
which securities may be deposited to the bid.
-
In the event that a bid is commenced in a Zimmerman
jurisdiction by way of advertisement, bidders should indicate that
the bid will not be made in Quebec, and is not capable of being
accepted in Quebec, until such time as it is mailed to shareholders
resident in Quebec.
-
A bid must permit securities deposited to
the bid to be withdrawn at any time prior to such securities being
taken up by the offeror and a director’s circular shall be prepared
and delivered by the board of directors of an offeree issuer within
10 days of the date of the bid.
Parties must also keep in mind that:
-
the "date" of the bid for securities
law purposes may differ between the two regimes since the date of
the bid could be the date that it is first advertised in a Zimmerman
jurisdiction, while in Quebec the date of the bid will continue
to be the date that it is mailed to offeree shareholders in Quebec.
-
any securities taken up by an offeror under a bid
must be paid for by the offeror as soon as possible, and in any
event not more than three calendar days after expiry of the bid
if it is made in Quebec, notwithstanding that the requirement in
the Zimmerman jurisdictions is three business days.
Transition
If a bid is commenced prior to March 31, 2001 but is
scheduled to expire after the implementation of the Zimmerman Amendments,
the pre-Zimmerman bid rules will apply. The Zimmerman Amendments will
apply in the Zimmerman jurisdictions to any bid commenced on or after
March 31, 2001.
Questions regarding implementation of the Zimmerman Amendments
may be directed to any of:
Sheryl Thomson
Senior Legal Counsel, Policy & Legislation
British Columbia Securities Commission
(604) 899-6778 or (800) 373-6393 (in B.C.)
sthomson@bcsc.bc.ca |
Marsha Manolescu
Senior Legal Counsel
Alberta Securities Commission
(780) 422-1914
marsha.manolescu@seccom.ab.ca |
Barbara Shourounis
Director
Saskatchewan Securities Commission
(306) 787-5842
bshourounis@ssc.gov.sk.ca |
Nancy Martin
Senior legal Counsel
Manitoba Securities Commission
(204) 945-5070
nmartin@cca.gov.mb.ca |
Ralph Shay
Director, Take-Over/Issuer Bids, Mergers & Acquisitions
Ontario Securities Commission
(416) 593-2345
rshay@osc.gov.on.ca |
Rosetta Gagliardi
Conseillère en règlementation
Commission des valeurs mobilières du Québec
(514) 940-2199 ext.4554 or (800) 361-5072 (in Quebec)
rosetta.gagliardi@cvmq.com |
Shirley Lee
Staff Solicitor
Nova Scotia Securities Commission
(902) 424-5441
leeap@gov.ns.ca |
Susan Powell
Program & Policy Development Specialist
Securities Commission of Newfoundland
(709) 729-4875
spowell@mail.gov.nf.ca |
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