The Ontario Securities Commission has once again served notice that poison pills instituted in the face of a takeover bid, without shareholder approvals, don't last long.
The OSC on Wednesday evening threw out the poison pill takeover defence put in place by Thirdcoast Ltd., which is fighting a takeover bid from Parrish & Heimbecker Ltd., saying that Thirdcoast has had plenty of time to find another takeover offer and nobody has come forward with a better bid.
Parrish & Heimbecker's attempt to buy Thirdcoast for its grain terminal on Lake Huron has been a nasty one, as chronicled recently by the Globe and Mail's Sean Silcoff.
That has carried over to the OSC proceedings.
P&H applied to the OSC to have the pill thrown out, but Thirdcoast fought back by asking the regulator to toss out lockup agreements that P&H had made with some Thirdcoast shareholders.
Thirdcoast lost on both counts. The regulator found no evidence that the lockups were coercive, and cease-traded the Thirdcoast poison pill in the ruling.
The law on poison pills in Canada has been muddied in recent years by some decisions allowing takeover defences if they are approved by shareholders, but the OSC decision keeps one thing very clear -- pills without shareholder support are not going to be allowed to stand for long.