OSC upholds minimum tender requirement, signalling it wants predictability in take-over regulation – Canadian Lawyer

Alex Gorka

March 16, 2021

In February 2021, the Ontario Securities Commission (OSC) released the reasons for its September 2020 order that dismissed the application for exemptive relief brought by ESW Capital Inc., the largest shareholder of Optiva Inc., from the mandatory 50% tender requirement under the Canadian take-over bid regime. In an article in Canadian Lawyer, reporter Zena Olijnyk examines the OSC’s reasons and turns to Alex Gorka, a partner in Osler’s Corporate Group, for his insight on the implications of the order. Alex explains that by dismissing ESW’s application for exemptive relief, the OSC is emphasizing the “essential role of predictability” in take-over bid regulation.

“This case signals the OSC wants to stick to the established rules of the regime, and it is not going to be willing to grant exemptions absent something truly exceptional or improper, which it did not find here,” Alex says. He goes on to point out that even the “extraordinary premium” that ESW offered minority shareholders wasn’t exceptional enough to convince the regulatory body to grant exemptive relief.

In early March, ESW agreed to sell all of its Optiva subordinate voting shares to OceanLink Management Ltd., EdgePoint Investment Group Inc., Maple Rock Capital Partners and Meson Capital in a private transaction. As Alex tells Olijnyk, the parties “obviously came to some sort of deal.”   

Read Zena Olijnyk’s full article, “OSC upholds minimum tender requirement, signalling it wants predictability in takeover regulation,” from March 9, 2021 on the Canadian Lawyer website.