While advance notice policies have been utilized by issuers in the U.S. for quite some time, they are still relatively new to the Canadian market. As a result, the Canadian jurisprudence on their use and interpretation continues to develop.
The Ontario Superior Court of Justice may have recently added some uncertainty when it granted a declaration in favour of Orange Capital, finding that the investment firm had complied with Partners REIT’s advance notice policy in respect of the time frame for nominating trustees. In light of its finding that Orange Capital had complied with the policy, the Court declined to rule on the validity of the policy itself. Orange Capital had been seeking a declaration that the policy was of no force or effect, as the board had not submitted it for approval of unitholders.
As we discussed in an earlier post, Orange Capital launched a tender offer in May to purchase up to 10% of the outstanding units of Partners in an attempt to acquire enough proxy votes to get a new slate of independent trustees appointed to Partners’ board. Under the terms of the tender offer, tendering unitholders were also required to deposit proxies appointing Orange Capital as proxy holder, for all deposited units, regardless of the number of deposited units actually taken up and paid for by Orange Capital.
Subsequent to discussions with the OSC, Orange Capital clarified certain aspects of its tender offer. Specifically, the additional details and conditions set out in the subsequent release by Orange Capital suggest that the OSC sought to impose aspects of the take-over regime in the immediate situation.Continue Reading...