The Parti Québécois government plans to bring in legislation making it tougher for Quebec companies to become targets of hostile foreign-takeover bids, fulfilling an election promise from the summer’s election campaign.
Finance Minister Nicolas Marceau told reporters in Montreal on Friday the bill would give the board of directors of publicly traded companies the authority to examine the impact of a hostile takeover bid on workers, retirees and suppliers and take into account their interests.
The legislation would also ensure the company is protected from potential legal action should it refuse a takeover bid. And if the board of directors viewed the hostile bid as being inadequate and having a negative impact on the company, it would have the authority to withhold the offer from being voted on by shareholders.
The legislation would give Quebec-based companies the ammunition needed to foil hostile takeovers such as the $1.76-billion bid for Rona Inc. earlier this year by U.S. home improvement giant Lowe’s.
Mr. Marceau noted that several U.S. states have adopted similar laws. For instance, in Iowa, Casey’s General Stores used a provision in state law to stop Quebec-based Alimentation Couche-Tard from taking over the company.
PQ Leader Pauline Marois had condemned Jean Charest’s Liberal government for failing to protect Quebec-based companies from being sold to outside interests.
In August, while holding an election campaign stop in front of a Rona hardware store in Saguenay, Que., Ms. Marois promised more government intervention in the economy to protect Quebec-based companies. She proposed the province’s pension fund, the Caisse de dépôt et placement du Québec, create a $10-billion “strategic investment fund” to protect the province’s businesses against foreign takeovers and stimulate growth in new companies.
“Jean Charest imposed a change in direction [at the Caisse] that accelerated the exodus of our head offices. Alcan, Domtar, Sico, Bauer, Van Houtte, the list keeps getting longer. Now it is Rona that is being threatened. We cannot stand idle,” Ms. Marois said during the election campaign.
There was no mention of the creation of a new strategic fund in the provincial budget tabled this week. While the PQ appears to have backed away from the proposal, Mr. Marceau was determined to push ahead with the legislation that will likely be tabled sometime in the new year.