What can the target do to resist change of control?
The target company can, subject to directors’ fiduciary duty, take the following actions under the Companies Act: – Institute a rights plan using share purchase warrants with discriminatory conditions, such that only certain shareholders can execute the warrants. – Amend its articles of incorporation to alter the necessary requirements for resolutions of the removal of directors or approvals of mergers, etc. – Grant an issue of shares or share purchase warrants with a call option exercisable by the company and/or a put option exercisable by the shareholder with discriminatory conditions. – Issue new shares or classified shares with veto rights concerning certain transactions to an amicable third party. – Merger, share exchange or formation of a joint holding company by stock-transfer with an amicable company.
