Teachers’ urges regulators to protect shareholders’ rights in corporate mergers
TORONTO - The Ontario Teachers' Pension Plan (Teachers') is urging Canadian securities regulators to disallow companies from voting newly issued shares acquired in private placements with the apparent purpose of swaying the outcome of takeover bids.
Teachers' has asked securities commissions in Alberta and Ontario to preserve shareholders' rights in connection with corporate mergers by disallowing tactics such as those used in Paramount Energy Trust's proposed takeover of Profound Energy Inc.
Wayne Kozun, Teachers' Senior Vice-President of Public Equities, said Teachers' is concerned about the issuance of shares on a private placement basis in anticipation of a merger or acquisition, particularly when the votes attached to the shares may alter the balance of voting on a corporate transaction.
"Permitting the use of structures by bidders to circumvent normal voting thresholds would be at odds with the reasonable expectations of shareholders, and would seriously undermine investor confidence in, and the integrity of, the Canadian capital markets," Kozun said in a letter to the regulators.
He said the pension plan supports a petition to regulators from ARC Funds to prevent Paramount from using shares gained in a recent private placement to vote in favour of its proposed takeover of the company.
Teachers' is an investor in an ARC fund and other affiliated funds.
- Teachers' letter to Ontario Securities Commission ( 855 KB PDF)
- Teachers' letter to Alberta Securities Commission ( 859 KB PDF)
Director, Communications and Media Relations
Ontario Teachers' Pension Plan