TNR Gold (TSXV: TNR) has received an unsolicited, non-binding proposal from Altius Minerals Corporation (TSX: ALS) to acquire all TNR shares it does not already own.
Altius holds 30,937,500 TNR shares, about 12.7% of the shares outstanding. Neither company disclosed a price, the form of consideration or a timeline. A special committee of independent directors reviewed the proposal and then entered into an exclusivity arrangement with Altius. The committee is said to still be evaluating the approach with its advisors.
The timing is notable. Altius said TNR responded to the proposal on October 5. That is the same day TNR moved its contested annual meeting to December 8 and settled a court dispute with its largest shareholder. Altius made the arrangement public on October 6 in an early warning filing, one day before TNR issued its own release.
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TNR said no decision has been made on a definitive transaction and that there is no assurance one will result. The company doesn’t plan to comment further unless a definitive agreement is reached.
Altius is already an established backer. It bought 23,500,000 shares in a private placement at C$0.1775 per share that closed in May. That deal included a right of first offer on individual royalties and a five-year voting support agreement. In July, Altius bought another 7,437,500 shares on the open market at C$0.23.
The voting agreement put Altius in the middle of a proxy fight that has occupied TNR for months.
Eucalyptus Resources Opportunities Fund 1, LP, led by Jon Christian Evensen, is TNR’s largest shareholder. Together with its joint actors, the fund controls roughly 33.2 million shares and in August Eucalyptus nominated four directors to replace the board. In making the nomination, Eucalyptus accused Executive Chairman Kirill Klip of running TNR as a family business and pointed to heavy dilution, cash compensation paid to the Klip family, and the lack of any royalty acquisition in his nearly 10 years as CEO. Eucalyptus has also argued that the Altius placement was designed mainly to keep management in place.
The meeting date has changed several times. It was first scheduled for June 16 and then moved to September 22. Days before that date, TNR cancelled the meeting, alleging that Eucalyptus had worked with undisclosed joint actors to buy and vote shares. Eucalyptus said it had already submitted proxies representing more than 46% of eligible votes for each of its nominees, and it took the dispute to court.
Proxy advisor ISS supported Klip’s re-election and recommended that shareholders withhold their votes from Evensen. ISS described the Altius placement as the clearest example of value creation during Klip’s tenure.
The October 5 settlement however dropped the petition and gave the current board time to finish a strategic review. That review now includes a takeover proposal from one of the board’s most significant backers.
TNR Gold last traded at $0.30 on the TSX Venture.
