Decision in brief: Aimia Inc, Transactional Proceeding, Motion to dismiss application, July 5, 2024

Mithaq Capital SPC is Aimia Inc.’s largest common shareholder. In February 2023, Mithaq started increasing its shareholdings of Aimia. In October 2023, a wholly-owned subsidiary of Mithaq offered to buy all of Aimia’s shares. That offer expired in February 2024 and was unsuccessful.

Two days before the offer expired in February 2024, Aimia brought this application. Aimia asked the Tribunal to decide that Mithaq’s increased shareholdings in February 2023 violated Ontario securities law. Aimia says that Mithaq was acting jointly (coordinating actions and share purchases of Aimia) with other shareholders and that Mithaq’s shareholdings combined with the joint actors’ was greater than 20% of Aimia total shares. As a result, Aimia says that each time Mithaq bought shares of Aimia in February 2023, the law provides that the purchase was a take-over bid. Aimia therefore had to offer to buy all of Aimia’s shares at the highest price of all those purchases.

This decision of the Tribunal deals with a motion that Mithaq brought. Mithaq says that the Tribunal should not hear Aimia’s application because: (1) Aimia does not have standing (the ability to apply to the Tribunal); and (2) Aimia’s application is an abuse of process. Aimia responded by saying that the Tribunal should not dismiss its application at this stage – instead, the application should proceed to a full merits hearing.

The Tribunal decided to consider Mithaq’s motion now because it would be quicker and more cost-effective. Doing so might avoid the parties having to prepare materials for a merits hearing.

The Tribunal decided that Aimia did have standing (i.e. the ability to bring this application). This is because a company whose shares are the subject of a take-over bid can apply to the Tribunal about that take-over bid. Aimia fell within that category.

While Aimia could apply to the Tribunal, the Tribunal decided that the application should not go forward, because there was a long delay of about a year before Aimia made the request. Aimia did not give a good explanation for why it hadn’t asked earlier for the Tribunal or a court to force Mithaq to offer to buy all of Aimia’s shares. During the year delay, many significant events happened, which changed the situation in important ways. It no longer made sense to make Mithaq offer to buy shares at a price based on what the share price was a year earlier.

This application was therefore a misuse of the Tribunal’s procedure.