Going-Private TransactionsI haven't paid much attention to the bashers' references to going private, because I consider this nothing but a red herring - just another effort to try and play down the fact that LBE continues on the road to success. Jilin Jien has publicly stated that they support the LBE plan to redeem the convertible securities, so I think there are better things to do than try to make a problem out of something that is unlikely.
I seem to recall no less of an expert than the lackey Rocky (and there can be no one that's less expert), mentioning something about 80% share ownership by Jilin Jien, and they could take LBE private. Today, Junior Strom made the pronouncement - "
At 80% they can go private." - another example of Junior agreeing with Rocky. But I've also been told, by a much more reliable source, that this is incorrect, and that 90% is the applicable percentage.
On checking the Canada and Ontario Business Corporations Acts, I see no pertinent references to 80%, but there is reference to 90%, that may be applicable. I do not believe this is an area in which a layman can provide a snap answer. On checking releases by well known law firms, I conclude that are many implications that make a going-private process difficult for the acquirer. In addition to the Business Corporations Acts, there are Ontario Securities Commissions regulations to protect the minority shareholder, requirements for independent valuation are involved, and there are also the federal Competition Act and Investment Canada Act that may be relevant. Many of the attempts have ended up in Court, as a class action case. Even if a company wanted to go private,
and there is no indication this is the case with Jilin Jien, it is certainly not a slam dunk and it is not some unfair "take-whatever-we- give-you" thing that can be crammed down minority shareholders' throats, as the bashers have portrayed.
I think the most important information that comes from this may be that it illustrates how unreliable the pronouncements of the bashers can be. These guys rhyme off claims, with no concern whether they are fact based. They refuse to substantiate their pronouncements, the readers don't know if they are outright intentional lies, or something they've read in their condo by-laws or rules for some board game.