May 2009


On May 11, 2009, the Ontario Securities Commission decided not to cease trade a tactical poison pill that had been approved by the shareholders of Neo Material Technologies Inc., a Canadian corporation listed on the TSX, in the face of an unsolicited partial take-over bid made by Pala Investments Holdings Limited. In the matter of Neo Material Technologies Inc. and Pala Investments Holdings Limited represents the first time that the OSC has decided not to invoke its public interest jurisdiction to cease trade a shareholder rights plan, either immediately or on temporal conditions, upon application by a hostile bidder. This decision also appears to represent the adoption by the OSC of the principles established by the Alberta Securities Commission in Pulse Data, which many observers had believed was an outlier in the Canadian poison pill landscape due to that decision's self-professed "unique circumstances".