They probably still have most of their 25 million shares.
Let`s say Century does receive a paper offer from WTG. Let`s say that Peggy and Ross feels the same way as many of us do about WTG`s market cap being grossly overstated relative to its asset profile - potentially sitting on thin ice ready to come apart with any type of slight pressure.
What are they to do about their 25 million Century shares?
Let`s say they want out fast.
They will likely not be able to sell 25 million shares on the open market without taking a serious share price discount, unless they find a private buyer and do a cross.
The dilemma is do they sit around and do nothing (and run the risk by taking, what is viewed by many as being, fraqile WTG shares) or do they go out and try to encourage a competing buyer for Century Mining?
If a competing buyer is reputable enough, and is able to provide a competitive offer price, I think it might be possible for that competing buyer to get a take up of 40 - 50% of Century shares (even if Finskiy and friends still want to keep their own shares). If the offer is good enough, there might even be a chance of getting 51% of Century, with controlling interest and operator rights. As controlling shareholder, the competing company would be able to declare dividends and get 51% of the cash being dividend out (once the company reaches the stage of generating huge profits).
An opportunity of getting a signficant share of an undervalued gold producing company, in a US$1,400 gold price environment, may be enticing to some grown driven companies.
Here is the primary problem: Potential players don`t know the detailed status of Lamaque. Century does not issue (what I would consider) frequent operating updates to the market (be it due to having an agenda or not). And, with any type of hostile bid, the Finskiy controlled BoD, 3 directors versus 2 directors, (I`m sure it`s safe to assume) will not open up the data room for competitors to review the data.
If I was either Peggy or Ross, I would still try to line up a hostile bid in order to protect the 25 million share interest (assuming there is a WTG bid and assuming they are very uncomfortable with it).
I am not them though. As such, I have absolutely no idea how they feel about the situation.
I AM CERTAINLY NOT SAYING THEY HAVE ANYTHING PLANNED.
However, I would like to see them initiative something that would give Century Mining shareholders an option, if the rumour WTG offer happens to occur.
11 comments:
I certainly hope a serious contender steps in with a counter offer. By all accounts, believe all retailers will be better served as such.
Hi Production05,
Your scenario about Peggy & Ross's dilemma coming to the recue is an intersting one. They certainly have an incentive to do so. We shall soon find out.
Someone said recently on this Blog that Mr Scola commented during a CC last year that they (him & Mr Finskiy) looked at 100 or more companies to invest in, and they settled on CMM, because it was the best value. Perhaps it's not surprising then that they want to take all of it for themselves & their cronies while it is cheap.
What do you think of the idea that Agnico Eagle could become our white night?
It is true Scola did say that he n Finskiy looked tro 100 or more co ...... it sounds interesting that Agnico Eagle should become the other contenter. Their mines (or some of them) are near by too.
As a new blogger but an old investor, it seems to me from past experiences similar to this that unity in what we vote as a group to accept out of this is at the top of the list. One can only hope that we can piggy back on deeper pockets like Peggy and Ross.
On Stockhouse, people have been talking about the idea that when (or if) we get taken over, the price for WTG should drop because of their overvalued assets. I don't express the same opinion on that for a few reasons. My facts might be wrong but this is my understanding..
1) Finsky and Scola basically make up the ownership of WTG. If any of the selling is coming from somewhere after we're taken over, it would be from them. However, they want to turn this into a 1 million an ounce producer, so it seems unlikely they will dispose of any shares after we're gobbled up.
2) Any CMM shareholders that get paper in WTG I'm assuming will not be selling in masses, as the people that have decided they want no part in WTG will have sold after CMM gets a premium from an offer (or two).
3) WTG is overvalued, but then again, isn't this the company that was formed to be a vehicle for the collection of Canadian gold mining assets. Their market cap is being driven by whatever Finsky and Scola want it to be. It might be a magical number, but at the same time they got it up there for a reason. I'm assuming Finsky and Scola have positions in multiple companies and have an idea which ones they will aim on taking over. Additionally, these guys have deep pockets and a clear strategy. Who comes out and just announces that they'll be a 1 million oz producer by 2016?
I'll probably end up selling half of my position if the premium is decent enough and letting the other half appreciate in WTG paper.
Fellow CMM Blog members (&others),
There are a couple of things you as shareholders might consider doing to protect and further our interests (in the cause of fairness).
(1) Send an e-mail to the TSX-Venture (information@tsxventure.com) registering your disappointment that the CMM BoD does not have the required number of Canadian Directors. I did this already, and they forwarded my e-mail to the Compliance & Disclosure Division.
(2) Visit the CMM, WTG and TAM booths at the PDAC convention and try to find out what is the "BUZZ".
The best to all.
HI Bigjohn37
I like your seggestions. Only able to do the first part but not the second part. Need to confirm the confirm the followings.
1) we have right now only 4 members in the board. Campoy, Scola, Daniel and Sheridian,
n only campoy(or sheridian) is canadian meaning only 20% canadian right?
2) regulations required min 25% canadian right?
As soon as U may.
Hi Wingfong,
Of note, I am not a lawyer so I don`t have the legal details on the in`s and out`s on all this legal stuff. A complex takeover situation may require legal expertise that is way beyond my very limited legal knowledge base. Though, I will try to do what I can (to point to whatever online info that is available).
There are now 5 Directors (Lamarque is the 5th).
They are listed here on Century`s website:
http://www.centurymining.com/s/Directors.asp
I don`t know if we can ever confirm their official residency status. However, the general understanding is (again, without official confirmation) that Major (likely UK), Scola (US), Campoy (US), Lamarque (likely UK or US or somewhere other than Canada) and Sheridan (Canada).
Century was incorporated under the Canada Business Corporations Act effective in 2004 (as opposed to a provincial act - some provincial acts don`t have the Canadian content requirement):
``1. Governing Statutes and Purpose of the Organization``
``Century Mining Corporation the “Company”) was incorporated under the laws of British Columbia and on July 22, 2004 was continued under the Canada Business Corporations Act (“CBCA”).``
This info can be found on Century`s website, within the latest quarterly statements (or any previous statements for that matter):
http://www.centurymining.com/s/FinancialStatements.asp
Here is a website that does a good job in explaining how the 25% Canadian content rule works:
http://www.blakes.com/DBIC/guide/html/canada-03.htm
``1.2.2 Are there residency requirements for directors or officers?``
``The one rule that particularly affects non-residents is a requirement under some Canadian statutes that a majority of the directors of a corporation be resident Canadians. The federal and the Ontario acts have been recently amended to reduce the Canadian residency requirement for corporations in most sectors to 25%, except where there are fewer than four directors, in which case at least one must be a resident Canadian. In Alberta, at least 25% of the directors must be Canadian residents. Permanent residents of Canada who are not Canadian citizens may qualify as “resident Canadians”, either absolutely or only for a specified period. There are no residency requirements for officers. Some jurisdictions (e.g., British Columbia, Quebec, New Brunswick, Nova Scotia and the Yukon) do not impose residency requirements for directors.``
Under the CBCA, having only 1 director with Canadian residency status is alright with 4 or more total directors. However, the 2 Canadian director requirement kicked in once Century increased total directors to 5. That would be my interpretation of the rule.
Of note, they cannot switch from the CBCA act into a provincial act (i.e. the Yukon Business Act, which has no Canadian content) without call a meeting of the shareholders to gain approval. I believe they would need 50% (plus 1 vote) to gain approval to make the switch.
``Under the CBCA, having only 1 director with Canadian residency status is alright with 4 or more total directors.``
Of course, that should read ``with 4 or less total directors``.
Hi Wingfong,
Production05 answered your questions (thanks for that P05!). A notice to the TSX will at least show the Finskiy/Scola group that CMM shareholders are not happy when they ignore even simple rules. As I pointed out elsewhere, WTG has no (or maybe one?!) Canadian directors. If they want to be listed in Canada, at least they should play by the (few) Canadian rules. That should not be so hard.
It would great Wingfong if you could make it to the PDAC convention. But I guess it's a bit out of the way for you! GLTA
Hi Prod05
Tks for the info n links provided. Will digest n see what is best to be done. And BJ37, appretiate your work assemblying some form of plan B. Is better this way, we may need it
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