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Shareholder rights plan cease traded as it had served its purpose by facilitating a competing bid.
Nunavut Iron Ore Acquisition Inc. applied to the Ontario Securities Commission for an order cease trading the shareholder rights plan of Baffinland Iron Mines Corporation.
Nunavut had made an unsolicited takeover bid for Baffinland, which was followed by a higher competing offer from ArcelorMittal supported by the Baffinland board.
The Commission found that the rights plan had served its purpose by facilitating an auction and generating a competing bid.
Maintaining the rights plan would only serve to eliminate the timing advantage of Nunavut's first-in-time offer and force an extension, potentially depriving shareholders of a revised offer.
The Commission concluded it was in the public interest to cease trade the rights plan immediately, allowing shareholders to decide between the competing offers.
Applications to vary management cease trade orders to permit a going private transaction denied.
The applicants sought to vary management cease trade orders (MCTOs) under section 144 of the Securities Act to permit trading in connection with a proposed going private transaction by Hollinger Inc. The Commission found that the applicants failed to demonstrate that varying the MCTOs would not be prejudicial to the public interest.
The Commission cited concerns regarding the lack of current audited financial statements, the adequacy of the independent valuation, the potential conflicts of interest in the proposed litigation trust, and evidence of undue influence exerted by related parties on the independent committee and valuator.
The applications were denied.
