In an article published on Wednesday in the National Post, Davies partner Patricia Olasker discusses the highly anticipated reasons that were released by the Ontario and Saskatchewan securities commissions in the Aurora Cannabis Inc./CanniMed Therapeutics Inc. hostile takeover.

Patricia commented that the reasons provided “reasonable guidance” for future M&A battles, and she supports the regulators’ decision not to interfere “piecemeal” with recently rebalanced takeover bid rules. She noted that another positive outcome was the acknowledgement that lock-up agreements “are important as a planning tool to facilitate bids.”

Patricia noted that by striking CanniMed’s shareholders rights plan, the decision created the potential for Aurora to increase its hold on CanniMed through market purchases of another 5% of shares and additional lock-ups making an alternative bid impossible. She commented that the regulators were untroubled by this, perhaps because of the arm’s-length nature of the bid and resulting lock-up agreements; an insider launching a takeover would not necessarily see the same results.

For more information on the Aurora/CanniMed decision read our bulletin.