Ahsineeg, Very interesting post and examples. Great start to your bullboard career.
I think this is one of the most interesting theories/articles that has been posted on here in weeks.
It is my humble opinion that Global were not hired to find somebody to buy LME, but were hired to aid in negotiating and assessing a current/pending offer. Just search “when should a special committee engage a financial advisor” and you get lots of M&A guidance and MI 61-101 rules.
Although reading and interpreting the MI 61-101 is a challenge, I see Global’s addition as a strong indicator of negotiations in progress or at least a potential offer. By the guidelines they have to be brought in before negotiations are too far down the path so that they can be advising the special committee through the negotiation along with legal counsel. If they are not brought on early enough in the negotiating process then counsel can be deemed ineffective and the offer open to litigation by disgruntled shareholders that expected more.
Guidelines for special committees retaining Financial Advisors
“Background on Fairness Opinions
• No general statutory or common law obligation to obtain a fairness opinion
• In nearly all Canadian public deals, the target obtains one or more fairness opinions
• assist the board in establishing that it acted in good faith and conducted a “reasonable investigation”
• establishes acting with due care and diligence in approving a transaction
• helps determine whether an Alternative Acquisition Proposal is financially superior (i.e. a Superior
Proposal)
• Opinions are not provided for the benefit of shareholders, although they are typically disclosed and shareholders may take some comfort from them
• Special Committee should consider the fairness of a proposed transaction from a broader perspective than just from a financial point of view
• IIROC prescribes standards for preparation of Fairness Opinions and certain disclosure requirements.”
I love the timeline of days for closing a buyout that the article lays out but I’m not looking forward to the complaining when it goes beyond what is stated. :o)
Not sure if Steve will have much he can add to the theories we have provided but, Steve, are you able to tell us who is on the special committee? Just curious. Not sure who would be an independent director as everyone has shares and options. Maybe they just mean independent of the acquiring company.
Cheers while we await the AGM/Special Meeting Lambo mentioned. Or maybe Roger's BIG BIG news