The Canadian Press - ONLINE EDITION

Caisse CEO says efforts to block hostile takeovers must be used selectively

  • Print

MONTREAL - The head of Caisse de depot, one of Canada's largest institutional investors, says he sympathizes with efforts that would empower Quebec companies to reject hostile takeovers.

Chief executive Michael Sabia said Wednesday that investors have to stop treating companies like commodities than can be bought and sold in the quest of short-term gain.

He described a Quebec task force's recommendations on protecting Quebec companies as "part of a tool box" of measures that need to be considered.

"It's a good idea, but inevitably you have to be selective," Sabia told reporters after releasing the pension fund manager's 2013 results.

Ultimately, markets will pressure companies that don't adequately perform, but Sabia said measures could be taken to avoid situations where quality companies are sold just to maximize short-term prices.

"There is always the risk of going too far," he said.

The Parti Quebecois government promised last week to implement recommendations that would give boards of companies registered in the province new tools to fend off unwanted takeovers. The idea has also been supported by the two opposition parties.

The task force headed by CGI executive Claude Seguin was created last spring in the wake of the failed attempt by U.S. retailer Lowe's to acquire hardware chain Rona Inc. (TSX:RON). A former Rona chief executive and former board member were among the task force's eight members.

Sabia said some elements of the report issued on the same day as the provincial budget "have the potential to be part of a good response to that very large question."

But he said the larger question is to develop a winning strategy that encourages the growth of companies and reinforces the economy in Quebec, Canada and elsewhere.

The proposed changes could have an impact on companies with widely traded shares such as SNC-Lavalin (TSX:SNC), Dollarama (TSX:DOL) and Metro (TSX:MRU), but would not affect many large Quebec companies controlled by shareholders through dual-class voting shares.

Quebec wouldn't be the first in North America to give boards more power to reject hostile bids. Iowa law helped Casey's General Stores successfully thwart Alimentation Couche-Tard's (TSX:ATD.B) hostile bid a few years ago.

But the efforts have been criticized by large investor groups and investment guru Stephen Jarislowsky.

He has said that while some key businesses such as Potash Corp., Inco and Alcan might need government protection from hostile takeovers to preserve Canadian head offices, it shouldn't apply to all companies.

Ultimately, boards shouldn't be able to stymie the will of shareholders, Jarislowsky said.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

RMTC preview of Good People

View more like this

Photo Store Gallery

  • Jia Ping Lu practices tai chi in Assiniboine Park at the duck pond Thursday morning under the eye of a Canada goose  - See Bryksa 30 Day goose challenge Day 13- May 17, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • A Great Horned Owl that was caught up in some soccer nets in Shamrock Park in Southdale on November 16th was rehabilitated and returned to the the city park behind Shamrock School and released this afternoon. Sequence of the release. December 4, 2012  BORIS MINKEVICH / WINNIPEG FREE PRESS

View More Gallery Photos

Poll

What are you most looking forward to this Easter weekend?

View Results

View Related Story

Ads by Google