Pro Rata (Equality) – Securities Regulation

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You can grab notes on other topic from here.

  • First-come, first-serve offers are NOT ALLOWED
  • IF more shares are tendered than requested, they MUST be taken up on a PRO RATA basis (e.g. buy 75% of each SH’s tendered holdings to get to your desired amount)
  1. Section 97.2: Consideration

s.97.2(1) If a formal bid is made, all holders of the same class of securities shall be offered identical consideration.

  1. Legislative Goal Met

Protect SHs by ensuring equality among them and providing time Provides:

  1. Equality: treated equally, no SH is benefitting more from a premium than another
  2. Time to review/no pressure: Gives the SH time to review the transaction and all of the pertinent information to ensure an informed decision because they are NOT PRESSURED TO BID EARLY (since it’s not first come, first serve)

You can grab notes on other topic from here.


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