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Bank Act (S.C. 1991, c. 46)

Full Document:  

Act current to 2024-02-06 and last amended on 2024-01-01. Previous Versions

PART VICorporate Governance (continued)

Corporate Records (continued)

Going-private Transactions and Squeeze-out Transactions (continued)

 [Repealed, 2005, c. 54, s. 57]

Compulsory Acquisitions

Marginal note:Definitions

  •  (1) In this section and sections 284 to 293,

    affiliate

    affiliate means a body corporate that is affiliated with another body corporate within the meaning of subsection 6(2); (groupe)

    associate of the offeror

    associate of the offeror means

    • (a) a body corporate that an offeror, directly or indirectly, controls, determined without regard to paragraph 3(1)(d), or of which an offeror beneficially owns shares or securities currently convertible into shares carrying more than 10 per cent of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing, or a currently exercisable option or right to purchase the shares or the convertible securities,

    • (b) a partner of the offeror acting on behalf of the partnership of which they are partners,

    • (c) a trust or estate in which the offeror has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity,

    • (d) a spouse or common-law partner of the offeror,

    • (e) a child of the offeror or of the offeror’s spouse or common-law partner, or

    • (f) a relative of the offeror or of the offeror’s spouse or common-law partner, if that relative has the same residence as the offeror; (associé du pollicitant)

    dissenting offeree

    dissenting offeree means a holder of a share who does not accept a take-over bid or a subsequent holder of the share who acquires it from the first-mentioned holder; (pollicité opposant)

    exempt offer

    exempt offer[Repealed, 2005, c. 54, s. 58]

    offeree

    offeree means a person to whom a take-over bid is made; (pollicité)

    offeree bank

    offeree bank means a bank the shares of which are the object of a take-over bid; (banque pollicitée)

    offeror

    offeror means a person, other than an agent, who makes a take-over bid, and includes two or more persons who, directly or indirectly,

    • (a) make take-over bids jointly or in concert, or

    • (b) intend to exercise jointly or in concert voting rights attached to shares for which a take-over bid is made; (pollicitant)

    share

    share means a share with or without voting rights and includes

    • (a) a security that is currently convertible into a share, and

    • (b) a currently exercisable option or right to acquire a share or a security referred to in paragraph (a); (action)

    take-over bid

    take-over bid means an offer made by an offeror at approximately the same time to all of the shareholders of a distributing bank to acquire all of the shares of a class of issued shares, and includes an offer by a distributing bank to repurchase all of the shares of a class. (offre d’achat visant à la mainmise)

  • Marginal note:Control

    (2) For the purposes of this section and sections 284 to 293, a person controls a body corporate when the person controls the body corporate within the meaning of section 3, determined without regard to paragraph 3(1)(d).

  • Marginal note:Date of bid

    (3) A take-over bid is deemed to be dated as of the date on which it is sent.

  • 1991, c. 46, s. 283
  • 2000, c. 12, s. 4
  • 2005, c. 54, s. 58

Marginal note:Right to acquire shares

 If, within one hundred and twenty days after the date of a take-over bid, the bid is accepted by the holders of not less than 90 per cent of the shares of any class of shares to which the take-over bid relates, other than shares held at the date of the take-over bid by or on behalf of the offeror or an affiliate or associate of the offeror, the offeror is entitled, on complying with sections 285 to 290, subsections 291(1) and (2) and section 292, to acquire the shares held by the dissenting offerees.

  • 1991, c. 46, s. 284
  • 2005, c. 54, s. 59(F)

Marginal note:Offeror’s notice to dissenters

  •  (1) An offeror may acquire shares held by a dissenting offeree by sending by registered mail within sixty days after the date of termination of the take-over bid and in any event within one hundred and eighty days after the date of the take-over bid, an offeror’s notice to each dissenting offeree and to the Superintendent stating that

    • (a) offerees holding not less than 90 per cent of the shares of any class of shares to which the take-over bid relates, other than shares held at the date of the take-over bid by or on behalf of the offeror or an affiliate or associate of the offeror, have accepted the take-over bid;

    • (b) the offeror is bound to take up and pay for or has taken up and paid for the shares of the offerees who accepted the take-over bid;

    • (c) a dissenting offeree is required to elect

      • (i) to transfer the dissenting offeree’s shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid, or

      • (ii) to demand payment of the fair value of the dissenting offeree’s shares in accordance with sections 289 to 292 by notifying the offeror within twenty days after receipt of the offeror’s notice;

    • (d) a dissenting offeree who does not notify the offeror in accordance with paragraph 286(b) is deemed to have elected to transfer the shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid; and

    • (e) a dissenting offeree must send the dissenting offeree’s shares to which the take-over bid relates to the offeree bank within twenty days after the dissenting offeree receives the offeror’s notice.

  • Marginal note:Notice of adverse claim

    (2) Concurrently with sending the offeror’s notice under subsection (1), the offeror shall send to the offeree bank a notice of adverse claim in accordance with subsection 129(1) with respect to each share held by a dissenting offeree.

  • 1991, c. 46, s. 285
  • 2005, c. 54, s. 60

Marginal note:Share certificates and election

 A dissenting offeree to whom a notice is sent under subsection 285(1) shall within 20 days after receiving the notice

  • (a) send to the offeree bank the share certificates representing the shares to which the take-over bid relates; and

  • (b) elect to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid or to demand payment of the fair value of the shares in accordance with sections 289 to 292 by notifying the offeror.

  • 1991, c. 46, s. 286
  • 2005, c. 54, s. 61

Marginal note:Deemed election

 A dissenting offeree who does not notify the offeror in accordance with paragraph 286(b) is deemed to have elected to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid.

  • 2005, c. 54, s. 61

Marginal note:Payment to offeree bank

  •  (1) Within 20 days after the offeror sends a notice under subsection 285(1), the offeror shall pay the money, or transfer the other consideration, to the offeree bank that the offeror would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 286(b).

  • Marginal note:Consideration in trust

    (2) An offeree bank is deemed to hold in a fiduciary capacity for the dissenting offerees the money or other consideration it receives under subsection (1).

  • Marginal note:Deposit or custody

    (3) An offeree bank shall deposit the money received under subsection (1) in a separate account in another deposit-taking financial institution in Canada and the offeree bank shall place any other consideration in the custody of another deposit-taking financial institution in Canada.

  • 1991, c. 46, s. 287
  • 2005, c. 54, s. 62

Marginal note:Fiduciary capacity of bank

 A bank that is making a take-over bid to repurchase all of the shares of a class is deemed to hold in a fiduciary capacity for the dissenting shareholders the money that it would have had to pay, and the other consideration that it would have had to transfer, to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 286(b). The bank shall within 20 days after a notice is sent under subsection 285(1) deposit the money in a separate account in another deposit-taking financial institution in Canada and place any other consideration in the custody of another deposit-taking financial institution in Canada.

  • 2005, c. 54, s. 63

Marginal note:Duty of offeree bank

 Within thirty days after an offeror sends an offeror’s notice under subsection 285(1), the offeree bank shall

  • (a) if the payment or transfer required by subsection 287(1) is made, issue to the offeror a share certificate in respect of the shares that were held by the dissenting offerees;

  • (b) give to each dissenting offeree who elects to transfer shares under paragraph 286(b) and who sends the share certificates as required under paragraph 286(a) the money or other consideration to which they are entitled, disregarding fractional shares, which may be paid for in money; and

  • (c) if the payment or transfer required by subsection 287(1) is made and the money or other consideration is deposited as required by subsections 287(2) and (3) or by section 287.1, send to each dissenting offeree who has not sent share certificates as required under paragraph 286(a) a notice stating that

    • (i) their shares have been cancelled,

    • (ii) the offeree bank or its designated person holds in a fiduciary capacity for that offeree the money or other consideration to which they are entitled as payment for or in exchange for the shares, and

    • (iii) the offeree bank will, subject to sections 289 to 292, send that money or other consideration to that offeree without delay after receiving the share certificates.

  • 1991, c. 46, s. 288
  • 2005, c. 54, s. 64

Marginal note:Court may fix fair value

  •  (1) If a dissenting offeree has elected to demand payment of the fair value of their shares under paragraph 286(b), the offeror may, within 20 days after it has paid the money or transferred the other consideration under subsection 287(1), apply to a court to fix the fair value of the shares of that dissenting offeree.

  • Marginal note:Idem

    (2) If an offeror fails to apply to a court under subsection (1), a dissenting offeree may apply to a court for the same purpose within a further period of twenty days.

  • Marginal note:Venue

    (3) An application under subsection (1) or (2) shall be made to a court having jurisdiction in the place at which the head office of the bank is situated or in the province in which the dissenting offeree resides if the bank carries on business in that province.

  • Marginal note:No security for costs

    (4) A dissenting offeree is not required to give security for costs in an application made under subsection (1) or (2).

  • 1991, c. 46, s. 289
  • 2005, c. 54, s. 65

Marginal note:Parties and notice

 On an application under subsection 289(1) or (2),

  • (a) all dissenting offerees who have made elections to demand payment under paragraph 286(b) and whose shares have not been acquired by the offeror shall be joined as parties and are bound by the decision of the court; and

  • (b) the offeror shall notify each affected dissenting offeree of the date, place and consequences of the application and of the dissenting offeree’s right to appear and be heard in person or by counsel at the hearing of the application.

  • 1991, c. 46, s. 290
  • 2005, c. 54, s. 66

Marginal note:Powers of court

  •  (1) On an application to a court under subsection 289(1) or (2), the court may determine whether any other person is a dissenting offeree who should be joined as a party, and the court shall then fix a fair value for the shares of all dissenting offerees.

  • Marginal note:Appraisers

    (2) A court may in its discretion appoint one or more appraisers to assist the court in fixing a fair value for the shares of a dissenting offeree.

  • Marginal note:Final order

    (3) The final order of a court shall be made against the offeror in favour of each dissenting offeree and for the amount for each dissenting offeree’s shares as fixed by the court.

  • Marginal note:Additional powers of court

    (4) In connection with proceedings under subsection 289(1) or (2), a court may make any order it thinks fit and, without limiting the generality of the foregoing, may

    • (a) fix the amount of money or other consideration that is deemed to be held in a fiduciary capacity under subsection 287(2) or section 287.1;

    • (b) order that the money or other consideration is to be held in trust by a person other than the offeree bank;

    • (c) allow a reasonable rate of interest on the amount payable to each dissenting offeree from the date the dissenting offeree sends the share certificates required under section 286 until the date of payment; or

    • (d) order that any money payable to a shareholder who cannot be found is to be paid to the Minister.

  • 1991, c. 46, s. 291
  • 2005, c. 54, s. 67

Marginal note:Status of dissenter

 Where no application is made to a court under subsection 289(2) within the period set out in that subsection, a dissenting offeree is deemed to have elected to transfer the dissenting offeree’s shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid.

Marginal note:Obligation to acquire shares

  •  (1) If a shareholder who holds shares of an offeree bank does not receive the notice referred to in subsection 285(1), the shareholder may require the offeror to acquire the shares

    • (a) within 90 days after the date of termination of the take-over bid; or

    • (b) if the shareholder did not receive an offer under the take-over bid, within 90 days after the later of

      • (i) the date of termination of the take-over bid, and

      • (ii) the day on which the shareholder learned of the take-over bid.

  • Marginal note:Acquisition on same terms

    (2) If the shareholder requires the offeror to acquire shares, the offeror shall acquire them on the same terms as those on which the offeror acquires shares from offerees who accept the take-over bid.

  • 2005, c. 54, s. 68

Marginal note:Payment of unclaimed money

 The Minister shall pay to the Bank of Canada any amounts paid to the Minister under subsection 291(4), and section 367 applies in respect thereof as if the amounts paid under subsection 291(4) had been paid under subsection 366(3).

 

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