Quebec to act on hostile takeover bids
The Canadian PressFriday, November 23, 2012
MONTREAL - Quebec Finance Minister Nicolas Marceau says the new Parti Quebecois government wants to change the law to make it more difficult for Quebec companies to be sold following a hostile takeover bid from foreigners.
The change could potentially help important Quebec-based businesses such as Rona Inc. (TSX:RON), whose thwarted takeover offer from a U.S. retailer in the summer drew sharp criticism from politicians in the midst of an election campaign.
It could also help others such as Metro (TSX:MRU) and Jean Coutu (TSX:PJC.A).
Marceau said Quebec wants to give boards of directors the right to take into account the views not only of shareholders, but also employees, retirees, suppliers and affected communities after receiving a hostile bid.
Several U.S. states have adopted similar provisions, such as Iowa, which Casey's General Stores used in 2010 to block a takeover proposal from Quebec's Alimentation Couche-Tard (TSX:ATD.B).
American home renovation retailer Lowe's attempted last summer to acquire Rona through a $1.8-billion proposal but retreated in September in the face of staunch opposition from Rona's board and Quebec politicians.
The government also wants to allow directors of public companies not to provide shareholders with a hostile bid it determines to be inadequate.
During last fall's provincial election, the governing Liberals and the Coalition party took similar positions to the Parti Quebecois, suggesting that any legislative changes should pass in the minority legislature.
Before proposing a law, the government plans to consult the business community, which could take several months.