Decision in brief: Mithaq, Transactional Proceeding, Merits, March 8, 2024

Mithaq Canada Inc. made a take-over bid, in which it offered to buy all the shares of Aimia Inc. that it did not already own. A company related to Mithaq is Aimia’s largest common shareholder. Mithaq asked that the Tribunal make orders about a private placement (a financing) that Aimia had announced. Aimia said that it would issue new securities, including Aimia shares and rights to buy Aimia shares from Aimia, to a group of investors. The Toronto Stock Exchange (TSX) approved Aimia’s financing and said Aimia did not require shareholder approval. Mithaq says that the financing was meant to block Mithaq’s offer and was improper, and that the TSX’s decision was wrong.

The Tribunal decided that Aimia’s financing was mainly designed to meet Aimia’s need for additional money and was planned before Mithaq announced its offer. While Aimia’s financing did significantly affect whether Mithaq’s offer would succeed, Mithaq did not prove that the financing was abusive to Aimia’s shareholders or Ontario’s capital markets.  

The Tribunal decided that Mithaq did not show that the TSX made any errors in its process or decision. The new evidence that Mithaq relied on did not justify changing the Tribunal’s decision.

Mithaq also asked the Tribunal to prevent the shares that were issued from being counted in the calculation that applies when a take-over bid is made, to see if enough shareholders decided to sell their shares to the bidder. The Tribunal decided not to make that order.

Finally, Mithaq asked for confirmation that it would be able to rely on the law that says a bidder can buy more shares while the bid is in effect. The Tribunal decided not to give the confirmation that Mithaq asked for, because the law was already there, and the Tribunal does not have the power to give confirmations like that. Aimia asked the Tribunal to take away Mithaq’s ability to rely on that law, because it said Mithaq’s bid wasn’t made in good faith, and had too many conditions. The Tribunal decided that there was nothing wrong with Mithaq’s offer, so it did not take away Mithaq’s ability

In coming to its decision, the Tribunal chose not to allow Mithaq and Aimia to rely on reports from experts who commented about how Aimia’s board acted. The Tribunal decided that it did not need help from experts in that area. The Tribunal did allow reports from experts who calculated the value of the securities that Aimia issued as part of its financing.