Reservoir Said to Weigh Options With Nevsun Proxy Vote Too Closeby
Vancouver-based miner subject of $365 million takeover offer
Effort by dissident shareholders to block deal cast doubt
Reservoir Minerals Inc. is weighing its options after early votes by its shareholders came back too close to call on whether to support its takeover by Nevsun Resources Ltd., according to a person familiar with the matter.
The Vancouver-based company needed two-thirds of its shareholders to support the $365 million stock and cash offer, and it’s unclear at this point whether it has that level of support ahead of a shareholder meeting Friday after the proxy deadline expired on Wednesday at 9 a.m. Vancouver time. A group of dissident investors campaigned to derail the deal.
Reservoir is now debating whether to extend the proxy deadline, postpone the shareholder meeting, or take the matter to a vote at the meeting, said the person, who asked not to be identified because the matter is private.
Chris MacIntyre, a spokesman for Reservoir, didn’t immediately respond to a voice mail left on his mobile phone.
Under terms of the deal, Reservoir shareholders will receive two Nevsun shares and $0.001 in cash for each common share they own. At the completion of the transaction, Nevsun shareholders would own roughly two-thirds of the combined company while current Reservoir holders would hold the remaining third. Reservoir traded at C$8.55 at 1:24 p.m. Wednesday in Toronto.
The plan came under attack by a group of shareholders including Jing Bao (Asia) Ltd. and Shandong Xiangguang Group Co., Ltd., which opposed the takeover on the grounds that it undervalued the company’s Timok copper and gold project in Serbia.
The dissident shareholders said they were part of a syndicate with an alternative financing proposal, which was rejected by the company’s board. They urged shareholders to reject the Nevsun proposal in favor of their own.
Despite those objections, Institutional Shareholder Services and Glass, Lewis & Co., two leading independent proxy advisory firms, recommended shareholders approve the plan of arrangement with Vancouver-based Nevsun.