(March 6 – 09:20 ET) – The Canadian Securities Administrators are finally preparing to introduce the so-called Zimmerman Amendments governing takeover bids.

The “Zimmerman Amendments” are intended to come into effect on March 31, but the CSA warn Quebec will likely not be ready to bring in the rules. This means two takeover/issuer bid regimes will exist in Canada.

The CSA say that if a bid involves “offeree” shareholders 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.

The CSA say the Commission des valeurs mobilières du Québec is not in a position to implement the Zimmerman Amendments until such time as the legislative amendments necessary to implement them in Quebec have been passed.

If a bid is commenced prior to March 31, but is scheduled to expire after the implementation of the Zimmerman Amendments, the pre-Zimmerman bid rules will apply. The amendments will apply in the Zimmerman jurisdictions to any bid commenced on or after March 31.

The amendments follow from a 1996 committee of the Investment Dealers Association (the “Zimmerman Committee”) commissioned to review takeover and issuer bid time limits. It produced a report setting out 14 recommendations, including 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 takeover bid by way of advertisement.

The CSA agreed to adopt the recommendations and established a committee to develop uniform wording for amendments in the eight jurisdictions with takeover 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.

They were 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 B.C., Alberta, Saskatchewan and Ontario securities commissions have asked their respective governments to proclaim the Zimmerman Amendments so that they come into effect March 31.

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.
-IE Staff