On September 25, 2009, the Toronto Stock Exchange (the "TSX") adopted amendments to its Company Manual which will become effective on November 24, 2009 ( the ??Effective Date??). The amendments will require TSX listed issuers to obtain security holder approval where they propose to issue securities in connection with the purchase of a public company where the securities to be issued exceed 25% of the TSX listed acquiror's outstanding securities (on a nondiluted basis). Currently the TSX does not require listed issuers to obtain security holder approval where securities are being issued in connection with the acquisition of a public company. When the amendments come into force on the Effective Date, the threshold dilution level will be the same for both public and private company acquisitions.
The amendments follow two prior public proposals of the TSX as well as the decision of the Ontario Securities Commission (the "OSC") In the Matter of HudBay Minerals Inc. ("HudBay"). In that decision, the OSC concluded that in the particular circumstances the fair treatment of shareholders and the public interest required shareholder approval for the issuance of securities of HudBay in its proposed acquisition of Lundin Mining Corp. which would have resulted in the dilution of HudBay shareholders of over 100%.
Most major stock exchanges require security holder approval in dilutive transactions, including the acquisition of a public company.