In an article published on Tuesday in The Globe and Mail (available to subscribers), Davies partner Patricia Olasker spoke about the lasting impact that the Aurora/CanniMed decision is expected to have on hostile takeover bids in all industries, particularly with respect to the use of tactical poison pills.

“It will really discourage tactical pills,” Patricia remarked. “After the rules changed, people continued to be intrigued by the notion that the tactical pill might play a role. What we read in this decision is, stop thinking about that. It’s not going to work. I think that’s the biggest takeaway.”

In their reasons for the decision released this month, regulators with the Financial and Consumer Affairs Authority of Saskatchewan and Ontario Securities Commission said they were wary of rights plans aimed at preventing lock-ups. “It will be a rare case in which a tactical plan will be permitted to interfere with established features of the take-over bid regime such as the opportunity for bidders and shareholders to make decisions in their own interests regarding whether to tender to a bid by entering into lock-up agreements of the kind under consideration in this case,” the regulators said in the reasons.

For further analysis of the implications of this decision on the use of poison pills and other defensive tactics, read our bulletin Weed Wars Part II: Tactical Poison Pills and Lock-up Agreements in Hostile Bids.