* Change would better protect companies from hostile bids
* Proposal would bring Canada more in line with U.S.
* Quebec plans a more far-reaching plan
TORONTO, Feb 26 Canadian securities regulators
want to change the rules on takeover defenses to make it more
difficult for hostile bidders to buy Canadian companies, a
newspaper reported on Tuesday.
The plan being floated would allow companies to keep "poison
pill" defenses in place almost indefinitely, greatly enhancing
their protection against unwanted suitors, according to the
Globe and Mail, which cited sources it did not identify.
Poison pills effectively raise the price of a hostile
takeover by enabling shareholders to buy additional stock in the
target company at a discount. Existing Canadian rules limit
their use to between 40 to 70 days while the company looks for a
"white knight" to make a friendly acquisition offer.
The new proposal, which would bring Canadian rules more in
line with those in the United States, comes in response to
growing concerns in Canada about foreign control of domestic
The Canadian Securities Administrators, an umbrella group
representing provincial regulators, is expected to present a
draft policy in mid March, said Mark Dickey, a spokesman for the
Alberta regulator, which currently heads the rotating leadership
of the CSA. He declined further comment.
The CSA will hold public consultations before implementing
any changes, the newspaper said.
Quebec's provincial regulator plans to release a more
far-reaching proposal at the same time, Louis Morisset, the
superintendent of securities markets in Quebec, said in a phone
Both proposals will be made public on March 14, he said.
Rona Inc, a Quebec-based home-improvement retailer,
rebuffed an unsolicited C$1.8 billion ($1.75 billion) takeover
proposal from U.S.-based Lowe's Cos Inc in August. The
Lowe's plan had sparked a wave of political opposition in
Spokespersons at the Ontario, British Columbia and other
provincial regulators were not immediately available to comment
on the Globe and Mail report.