The hottest trend in corporate law found itself in Canada’s coldest corner last week when a handful of Bay Street lawyers toting briefcases braved minus 30 degree weather and puzzled stares to climb the steps of a courthouse in Whitehorse.
The most remarkable thing about the legal blitz was not that it was taking place in Canada’s frozen North. No, what made this gathering so extraordinary was that the Toronto lawyers were high-priced takeover specialists who had been dispatched by shareholders to declare war on a planned merger.
In a country long dominated by a tightly knit club of powerful business groups, it was unheard of for major law firms to launch corporate attacks on behalf of investors. Today, the growing clout of multibillion-dollar equity, hedge and pension funds has transformed shareholder activism into one of the fastest growing and most lucrative areas of corporate law. Top firms are tripping over each other to snare shareholder retainers and even send teams to such remote outposts as Yukon because the cases can involve months of legal work and large teams of lawyers.
“We’re not usually in the business of deconstructing a takeover, but this has become a very intriguing area of law,” said Luis Sarabia, a partner with top mergers and acquisitions firm Davies Ward Philips & Vineberg LLP, who left his Toronto office for Yukon last week to lead the charge against a planned merger of Canada’s Bolivar Gold Corp. with South African heavyweight Gold Fields Ltd.