The circumstances leading up to a public M&A (Mergers and Acquisition) transaction will vary in each case but generally public M&A transactions are effected by a take-over bid, pursuant to applicable securities laws, or a plan of arrangement under applicable corporate laws and pursuant to applicable securities laws.
A take-over bid may be “friendly”, meaning the transaction is occurring with the approval of the board of directors of the target company, or “hostile” meaning the transaction is occurring without the approval of the board of directors of the target company. In either case the transaction will proceed by a take-over bid circular prepared in accordance with applicable securities laws and can be completed in as little as 35 days following the delivery of the take-over bid circular to the shareholders of the target company.
A plan of arrangement is generally a collaborative process with the parties proceeding by way of an arrangement agreement and plan of arrangement prepared in accordance with applicable corporate laws. Subject to certain limitations in the corporate laws of some Canadian jurisdictions, an plan of arrangement can be customized as circumstances require and an acquisition can proceed by amalgamation, three-cornered amalgamation or share exchange among other possible ways. A plan of arrangement will require approval of the target company’s shareholders and interim and final approval of the court. A public M&A transaction by plan of arrangement may take between 60 to 120 days once the arrangement agreement has been entered into.
