Anonymised, illustrative composite. A listed Canadian manufacturer was the object of an unsolicited take-over bid it wanted nothing to do with. It discovered that the Competition Act imposes a filing obligation on the party being bid for, on a clock the bidder starts.
At a glance
A Canadian manufacturer of precision components for the aerospace and rail supply chains, listed on the TSX with a market capitalisation around $240,000,000, received an unsolicited all-cash offer at $9.40 per share from a larger foreign strategic that already competed with it in two of its four product lines. The board formed a special committee, took advice, and recommended rejection on the eighth day. Nothing about that process was unusual; see the material adverse change glossary entry for the kind of protection a friendly deal would have negotiated and a hostile bid simply does not have.
What the board had not planned for was that its own rejection did not end its obligations. The bidder had already filed with the Commissioner of Competition.
Every other notification mechanic in Part IX assumes a willing filer. s.114(1) speaks to “the parties to a proposed transaction”, and in a negotiated deal both sides want the filing made and made well, because the waiting period stands between them and closing. On a hostile bid the incentives invert: the target's interest is in the review taking as long as possible, or in the bidder's information being as thin as possible.
Parliament closed that off. s.114(3) provides that where a proposed transaction is “an unsolicited or hostile take-over bid” and the Commissioner receives prescribed information from the bidder, the Commissioner must notify the target, and “the entity shall supply the Commissioner with the prescribed information within 10 days after being so notified”. The target's counsel initially read this as directory. It is not: it is the same “shall” that governs s.114(1), and the consequence of non-compliance is that the target has failed to give the information required under Part IX.
The second problem was subtler and killed the strategy outright.
The bid was open for the minimum deposit period allowed by Canadian take-over bid rules — a securities-law clock, not a Competition Act one, and the two run independently. The target's advisers had modelled a defence assuming the competition review would outrun the bid's expiry and force the bidder to extend at least twice, each extension costing it momentum with the target's shareholders.
The model assumed a waiting period that started when the last party filed. On that assumption, filing on day 10 rather than day 1 added nine days to the review, and a deficient filing that drew a supplementary information request added another 30 days on top. Across two rounds the defence team had penciled in roughly 60 days of drift.
The real figure was zero. Every day of that 60 was arithmetic performed on the wrong clock.
s.123(1)(a) sets the ordinary waiting period at “30 days after the day on which the information required under subsection 114(1) has been received by the Commissioner”, extended under s.123(1)(b) where the Commissioner issues a supplementary information request under s.114(2) — which she may do “within 30 days after receiving the prescribed information, send a notice to the person who supplied the information requiring them to supply additional information that is relevant to the Commissioner's assessment of the proposed transaction”.
Then s.123(3): “In the case of an acquisition of equity interests to which subsection 114(3) applies, the periods referred to in subsection (1) shall be determined without reference to the day on which the information required under section 114 is received by the Commissioner from the entity whose equity interests are being acquired.” The waiting period is computed off the bidder's filing. The target's filing date is expressly disregarded.
Get the unit right and the whole defence collapses. s.114(3) imposes a duty on the target; s.123(3) removes any benefit from breaching it. The target is compelled to file and gains nothing by being slow — a combination that appears nowhere else in Part IX. The only lever the target retains is s.123(2), under which the waiting period ends early if the Commissioner notifies the parties that “the Commissioner does not, at that time, intend to make an application under section 92 in respect of that proposed transaction” — and that lever runs the wrong way for a target trying to slow things down.
The target filed on day nine, complete. Having lost the timing defence, the special committee redirected to the defence that actually had value: a canvass of alternative acquirers under a formal process, which produced a competing proposal at $10.75 in cash and shares nineteen days later. The original bidder raised once and then walked.
The competition review itself proceeded on the bidder's clock throughout and was never the constraint. The board's own file recorded the lesson as a scoping error rather than a legal one — the defence plan had been built by securities counsel working from the take-over bid timetable, and nobody had mapped the Part IX clock onto it until the Commissioner's notice arrived. For the process that replaced it, see choosing between a broad auction and a quiet approach and competing against another buyer for the same target.
Filing late would have produced no delay and real exposure. The target would have been a person who failed to give the information required under Part IX, and s.123.1 gives the court a suite of orders on the Commissioner's application against “a person” who has not complied — the section is not confined to the acquirer. A board that had already rejected the bid would have been explaining to its own shareholders why it had incurred regulatory exposure in pursuit of a delay that s.123(3) had already foreclosed.
There is also a disclosure cost. A target that is visibly non-compliant with a federal filing obligation hands the bidder a talking point in every circular it sends to the target's shareholders, at exactly the moment the board is asking those shareholders to trust its judgement.
The tell was in the defence memo's own wording: it described the competition filing as something “the bidder must do”. Any plan that treats a regulatory clock as belonging to the other side is a plan that has not read the section that assigns the duty. On an unsolicited bid the target is a filer, not a spectator.
The structural tell is worth generalising. Where a statute imposes an obligation on an unwilling party, look immediately for the anti-avoidance subsection — Parliament rarely creates a duty of that kind without also removing the benefit of breaching it. Here it sits two sections later, in s.123(3).
A 30-minute call is enough to tell you whether AI pays for itself here.
Canadian small-business transaction data is not published anywhere, so most valuations in this country quote an American benchmark. The Deavo–Treadstone Acquisition Index is a daily record of Canadian listings built to replace that: asking-price distributions by province and city are published now, and days on market, departure rates and asking-to-sale spreads follow as the series lengthens. Leave an email and we will tell you as each measure lands.
No pitch, no listings. One email when the first report lands.
