As a follow up to our previous post “Time will tell if the timing’s right: CSA adopt the most sweeping changes to the Canadian take-over bid regime in a generation” we are reporting on the first hostile take-over bid of a Canadian reporting issuer launched under the new rules that came into effect on May 9, 2016. On July 8, 2106, Hecla Mining Company filed a take-over bid circular relating to a bid for all of the outstanding shares of Dolly Varden Silver Corporation, a TSX Venture Exchange listed issuer.
We will be monitoring the advancement of Hecla’s hostile bid with the hope that some of the questions that have been raised by the recent amendments will be answered. At this time, it appears that Hecla has applied to the BC Securities Commission to cease trade a private placement by Dolly Varden, announced following Hecla’s press release regarding its intention to make the hostile bid, on the grounds that the private placement is an inappropriate defensive tactic. It will be particularly interesting to see how the regulators will respond to this or any other alleged defensive tactics of Dolly Varden under the new rules.
Hecla’s hostile bid meets the requirements of the new regime for a 50% minimum tender requirement and a minimum bid period of 105 days, subject to the board of directors of Dolly Varden shortening such period. The board of directors of Dolly Varden is required to respond by filing a Directors’ Circular within 15 days of the bid commencement.