Brascan Ltd. v. Edper Equities Ltd.
United States District Court for the Southern District of New York
477 F. Supp. 773 (S.D.N.Y. 1979)
Edper (defendant), already a 5% shareholder in Brascan (plaintiff), used a securities firm to quietly approach roughly 65 sophisticated institutional and individual investors, offering a modest premium to buy shares on the open market — ultimately acquiring 24% of Brascan's stock over two days, briefly pausing under Canadian regulatory pressure before resuming purchases. Brascan sued, arguing the purchases were effectively an undisclosed tender offer violating the Williams Act's disclosure requirements and federal antifraud rules, and sought to force Edper to divest the acquired shares.
Whether a purchaser must comply with the Williams Act's tender-offer disclosure requirements any time it acquires a large volume of stock on the open market, regardless of whether the acquisition actually functions as a tender offer.