MineAfrica Surviving the Global Financial Crisis in the Mining Sector Understanding the Key Legal and Regulatory Issues in the Current Environment. Presenters: Janne Duncan and Brian Levett Partners, Toronto office February 28, 2009. Agenda. mergers and acquisitions
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
MineAfricaSurviving the Global Financial Crisis in the Mining SectorUnderstanding the Key Legal and Regulatory Issues in the Current Environment
Presenters: Janne Duncan and Brian Levett
Partners, Toronto office
February 28, 2009
- metal purchase agreements
- off-take agreements
- royalty agreements
Can acquire control without target board of directors'/management consent
May have less access to financial information about target
Second-step transaction may be required if get less than 90%
Take-over bid rules may be onerous eg., collateral benefits, identical consideration etc.
Plans of arrangement
Accommodates complex structures eg., different consideration for classes, tax planning, pre-closing asset sales or reorganizations
Can be assured of 100% if successful with only 66 2/3% approval
May have better access to information about the target
Avoid certain rules on take-over bids eg., collateral benefits
Lose control over timing
Court hearing can give voice to angry stakeholders – BCE vs. BondholdersTake-over bid vs. plan of arrangement
– Financial statements of acquiror or merged company
– Fairness opinion
- If payment is in acquiror's stock how do you value the stock in this market?
– More attention to "force majeure"
Hexion Specialty Chemicals (October 2008)
- Expanded MAC provisions to cover economic conditions
- premature disclosure could harm the company
- AiT Advances Information Technologies Corporation (Ontario Securities Commission, October 2007)
- the question of when disclosure is required is not a bright line test and depends on facts and circumstances
- in MD & A context there must be sufficient commitment from both parties that transaction will be entered into and completed
- MD&A - disclosure re operations, capital resources and liquidity risk
- incorporate risk into performance measures
- change to longer-term performance measures
- reduce or eliminate options
- reduce equity component and more deferral requirements
- repricing/repurchase and cancellation of options requires shareholder approval; exchange ratio?
- focus on succession planning
Rio de Janeiro