Hi NC,
I was waiting for today's clarification before responding to you.
Unfortunately, I do not have the legal expertise to provide a complete picture, but here are my own basic thoughts and understanding so far:
A take over can be executed in many forms. A "take-over bid" is just one of those forms. A take over can also be done through an amalgamation, plan of arrangement or merger.
Previous to today, they were using the word "offer" to describe their plan, without giving any further specifics. That is why I was using the word "likely", where refering to a straight take-over. Plus, IMO all of these guys are totally focused on loopholes nothing surprises me about them.
IMO, if minority shareholders stick to their guns then Severstal's first take over try will fail. They need 90% of minority shares in order to succeed with a "take-over bid" approach. They might have been forced to use the "take-over bid option due to their large share holdings in HRG, but not 100% sure. A lower percentage is required with a Plan of arrangement approach, but that would also mean going through the court system.
It is my belief that they are using the "take-over bid" approach on the first try in order to set up future efforts.
We need to ensure their future efforts are as difficult as possible by sending a strong message with the "take-over bid".
This is from the Ontario Business Corporation Act (OBCA):
“Take-over or issuer bid”
“188. (1) If within 120 days after the date of a take-over bid or an issuer bid, the bid is accepted by the holders of not less than 90 per cent of the securities of any class of securities to which the bid relates, other than securities held at the date of the bid by or on behalf of the offeror, or an affiliate or associate of the offeror, the offeror is entitled, upon complying with this section, to acquire the securities held by dissenting offerees. R.S.O. 1990, c. B.16, s. 188 (1).”
At a later date, I will see if I can explain how a plan of arrangement might work (in Ontario) once I am a bit more comfortable with the available info. My understanding is that the threshold for the plan of arrangement approach and the amalgamation approach is usually identical. Under former Instrument 61-501, the amalgamation threshold better favoured us, as Ontario had an added advantage over most other provinces. Ontario had a requirement for the total amalgamation/plan of arrangement vote to be 66 2/3 (including acquirer's shares),
in addition to non-acquirer votes being 50% or greater. Under 61-501, the amalgamation/plan of arrangement would not pass unless both of these requirements were met in Ontario, is my understanding. However, my problem is that 61-501 was revocated effected January 1, 2008, with the launch of the new Instruments. At this point, I cannot say either way if the 50% non-acquirer stipulation, in Ontario, has been carried forward to the new Instruments.