The role of shareholders in M&A transactions

Summary provided by officers
IBA Corporate and M&A Law Committee

A session at the IBA Annual Conference Toronto 2025, on 3 November 2025

Session Co-Chairs
Harry Coghill, Macfarlanes, London
Gabriella Covino, Gianni & Origoni, Rome

Panelists
Christine Carson, Carson Proxy Advisors, Toronto
Jennifer Grossklaus, Davies Ward Phillips & Vineberg, Toronto
Xanthe Ranger, American Securities, New York
Rabbe Sittnikow, Hannes Snellman, Helsinki

Session summary

Our 2025 Toronto session ‘The role of shareholders in M&A transactions’ held on Monday afternoon explored the different ways of dealing with shareholders when executing M&A transactions. In particular, the panel, which was moderated by Gabriella Covino and Harry Coghill, noted that significant M&A transactions generally require engagement with one or both sets of shareholders. However, some transactions can be executed without any involvement of the parties’ respective shareholders. The discussion opened with an explanation of the role of proxy advisers in recommended public M&A deals, before going on to look at more challenging situations, including how to deal with reluctant shareholders in a private M&A deal and how to handle shareholders in hostile public situations. The panel concluded by looking at the challenges that can arise when there is a broad shareholder base and issues to consider when utilising rollovers, in both public M&A and sponsor-to-sponsor transactions.

Key takeaways

In regard to public M&A deals (even those that are recommended), early-stage shareholder identification and ongoing analysis of ownership changes throughout the transaction lifecycle are extremely important.

• there can be significant technical challenges when using drag rights to sweep up recalcitrant shareholders during a private M&A deal, so it is wise to seek expert local legal advice at an early stage in such circumstances;
• public M&A structures (such as a plan/scheme of arrangement or a tender offer) can be a useful alternative when there is no drag or where the drag is not well-drafted or cannot be used due to pre-conditions that have not been satisfied;
• there are various issues to consider when the target has a broad shareholder base, many of which are of a practical nature (such as appointing a shareholder representative to reduce the administrative burden the bidder will otherwise face in having to deal with multiple sellers); and
• in sponsor-to-sponsor transactions where there is a significant rollover, it is important to align the parties at the outset on matters such as exit rights (in addition to the usual governance and economics points) to minimise the risk of future conflict.