The Ontario Securities Commission has granted Bank of Nova Scotia, its investment banking division Scotia Capital Inc. and Royal Bank of Canada intervenor status at a July 5 hearing to consider issues related to the proposed privatization of Sears Canada Inc.

The regulator said late Wednesday the banks were given full standing at the hearing which will centre on an application by three U.S. hedge funds that are fighting the proposed $908 million buyout by Chicago-based Sears Holdings Corp.

The trio, including Hawkeye Capital Management LLC, Knott Partners Management LLC and Pershing Square Capital Management LP, are minority shareholders in the Toronto-based retailer.

They have threatened to take legal action against Sears Holdings, alleging the current $18 a share offer does not represent the department store operator’s fair value, which they argue ranges between $41.21 to $46.67 per share.

They have also complained to the OSC about Scotiabank’s role in the takeover. Scotia Capital was hired by Sears Holdings as an adviser on its takeover offer, while another arm of the bank tendered a block of Sears Canada shares to the bid.