RE:RE:RE:MergerThe Mogo/Difference transaction needs the approval of ......
A] 66% of all DCF shareholders
B] A majority of DCF shareholders excluding Difference related parties that hold Mogo shares.
Most of the 49.8% of DCF shares that have been pledged in support of the agreement are owned by Michael Wekerle and cannot be voted under section B. In addition to the Mogo shares that he owns as a result of his DCF holdings Wekerle also owns 2.65 million Mogo shares directly.
Mogo is burning through cash and will likely run out of funds very early in 2020. They desperately need access to DCF's cash and to monetize the DCF investment portfolio.
Wekerle clearly has a vested interest in protecting his Mogo position but other DCF shareholders may not be so enthusiastic with this deal especially under such egregious terms.. After years of mismanagement at DCF they may prefer to see the company liquidated and the proceeds returned to them rather than being tilted at the Mogo windmill.
SamRothstein wrote: I agree with you that this transaction is very good for Mogo (and will be good for Diffference once Mogo shares cross the $4.50 mark and extremely good as shares climb beyond that). I disagree that it it is non starter though. I think the Difference shareholders will take the deal to switch horses and go all in on Mogo. There is a good reason that "voting and support agreements representing approximately 21.8% of outstanding Mogo Shares and approximately 49.8% of outstanding Difference Shares executed in support of the Transaction". Insiders want to do the deal, to the extent that the CEO and co-founder of Difference is going to have to walk away (but with more valuable shares in his pocket). Worst case scenario they have to slighly sweeten the pot but i don't think they will even have to. Difference Capital has maybe 4 employees and has probably done more bad deals than good ones. But they got it right with Mogo and so they are going all in, a smart move as Mogo shares have legs, a good brand and a bright future. And the vote it not until June, and by then we will have another great quarter of results that should further convince any Difference minority shareholders.