Core Gold Inc. (TSXV: CGLD), a mining and exploration company based in Canada, has announced that its Board of Directors will not be making a recommendation to its shareholders regarding the amended unsolicited Titan Offer from December 17, 2019.
Previously in July 2019, Core Gold redefined its strategic process and had asked various parties to offer confidential proposals such as joint ventures, acquisitions, or mergers. Although Titan Minerals Ltd. (ASX: TTM) declined to enter into a confidentiality agreement, it did propose purchasing all of the Core Gold outstanding common shares, with a ratio of 2.5 Titan ordinary shares to 1 Core Gold common share.
However, on December 9, 2019, Titan decided to improve its initial unsolicited offer, with a ratio of 3.1 ordinary Titan shares for 1 common Core Gold share. As a result, Titan was able to secure 51.7% of Core Gold’s common shares in a lock-up agreement.
Albeit Titan’s bid to takeover Core Gold is hostile in nature, the Core Gold Board of Directors have decided to abstain from making a recommendation to its shareholders as to whether or not to accept Titan’s increased offer. As such, the Board of Directors have outlined several reasons as to why they will forego making any recommendations:
The Board of Directors have acquired an independent fairness assessment, which determined that Titan’s amended offer is financially fair to Core Gold shareholders, and Titan has met the minimum shareholder lock-up agreements required by law to continue with the takeover. Moreover, The Board of Directors, some of which are Core Gold common shareholders, have agreed that due to conflict of interest and lack of impartiality, any recommendation on their behalf would be biased towards Titan’s offer.
Titan Minerals last traded at AUD$0.18 on the Australian Securities Exchange, which places the proposed value per share of Core Gold at AUD$0.558, or approximately CAD$0.50.
Core Gold Inc is currently trading at $0.24 on the TSX Venture.
Information for this briefing was found via Sedar and Core Gold Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.