Imperial Metals Corporation (TSX:III), American Bullion Minerals Ltd., ("ABML") and Red Chris Development Company Ltd. has announced they have signed a definitive agreement under which RCDC will acquire all of the issued and outstanding common shares of ABML not presently owned by RCDC.
Under the terms of the Agreement, each holder of Minority Shares (other than holders exercising dissent rights) will receive $2.25 cash for every Minority Share held. The total consideration payable under the proposed transaction (the "Transaction") is approximately $22 million.
It is anticipated that the Transaction will be carried out by way of a plan of arrangement under the Business Corporations Act (British Columbia) (the "Arrangement") whereby RCDC will acquire all of the Minority Shares. Completion of the Transaction is subject to a number of conditions, including: approval of the Arrangement by the Supreme Court of British Columbia; approval of the Arrangement by at least: (i) 75% of the votes cast by ABML's shareholders and (ii) a simple majority of the votes cast by holders of Minority Shares; and the holders of not more than 10% of the outstanding common shares of ABML exercising their right to dissent to the Transaction. It is anticipated that ABML will hold a special meeting prior to April 21, 2011 to consider the Transaction.
The securities of ABML have, since 2001, been subject to a cease trade order issued by each of the British Columbia, Alberta and Ontario securities commissions as a result of ABML's failure to file audited financial statements. On September 14, 2001 the common shares of ABML were delisted by the Toronto Stock Exchange as a result of ABML's failure to satisfy its minimum listing requirements. Bloomberg records indicate that the common shares of ABML traded to a low of $0.07 per share prior to the cease trade orders. At present, the common shares of ABML are not listed or quoted on any stock exchange or other market and the trading of such securities is prohibited by the cease trade orders. A revocation of the cease trade orders will be required to facilitate the Transaction. Subject to the completion of the above conditions, among other things, the Transaction is expected to be completed by May 23, 2011. An information circular for the special meeting of ABML's shareholders, which will contain full details regarding the Transaction, is expected to be mailed in March 2011.
On September 23, 2008, the board of directors of ABML (the "Board") formed an independent special committee (the "Special Committee"), with a mandate to establish and implement a process to solicit, negotiate and evaluate offers to purchase the Minority Shares. The Board, acting on the recommendation of the Special Committee, has approved the Transaction and determined that the Transaction is fair and is in the best interest of ABML and to holders of Minority Shares and accordingly, the Board has recommended that shareholders of ABML vote in favor of the Transaction. Capital West Partners has provided a fairness opinion to the Special Committee concluding that the Transaction is fair, from a financial point of view, to holders of Minority Shares.
The Agreement provides for customary deal protections, including a non-solicitation covenant by ABML, a five business day right for RCDC to match any superior proposal received by ABML and payment by ABML to RCDC of a termination fee of $675,000 if the offer is not completed in specified circumstances. The Transaction is not subject to a financing condition.
Source: Imperial Metals Corporation