Surge Battery Metals Inc. V.NILI

BUYOUT TERMS (so that people understands how it is done)

[deepoil0808]

I owned shares in a corporation that was previously bought out.  The purchaser did not buy the shares of the corporation but the main asset of the corporation.  (in our case it is the Nevada property).

The companyn that sold out (in our case NILI) then paid out a dividend to all shareholders for the amount of the sale price.

Timeline of events from prior buyout:

In August 2021, negotiations of a buyout began.   

In November 2021 confidentiality agreements were signed. 

In January 2022, the seller corporation (in our case NILI) hired a law firm to prepare a FAIRNESS AGREEMENT.  Management cannot sell at less than fairness valuation (in our case it is $ 500 million, at this moment).

In April 2022 management agrees to buyout and signs documents. 

In May 2022, a press release is finally made public, informing of the buyout (nothing was announced prior to this).

In June 2022, a vote put to the shareholders to agree or not to the buyout terms.  You need 66 2/3 votes of the shareholder votes to approve a buyout.

Buyout was approved and dividend was paid out in August 2022.

Company then closed their doors in September 2022. 
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This is what it looks like in terms of paperword and news release....when public is informed:

Fairness Opinion: xxxxxx Inc. ("Law firm") has provided a fairness opinion in connection with the Transaction which provides that, as of the date of such opinion, and subject to the assumptions, limitations, and qualifications on which such opinion is based, the consideration to be received by the Company pursuant to the sale agreement is fair, from a financial point of view, to the Company

Board and Special Committee Recommendations

The Board, after receiving the unanimous recommendation of the Special Committee, ‎has unanimously determined that the Transaction is in the best interests of ‎the Company and that the consideration to be received by the Company pursuant to the Sale is fair to the Company. Accordingly, the Board approved the sale and recommends that Shareholders vote ‎in favour of the Transaction

Shareholder Vote Approval

The Transaction will constitute the sale of all or substantially all of the undertaking of the ‎Company pursuant to the Corporations Act (province), and accordingly will require ‎approval by not less than 66% of the votes cast at the special meeting of Shareholders of the Company called for June xx, 2022. In addition to Shareholder approval, the Transaction is subject to receipt of consents and approvals from certain governmental authorities and other parties, as well as other closing conditions customary in transactions of this nature.

Good Luck,

[Insidetrader69]

Just curious, how was the dividend paid out and at what rate in your situation? 

[deepoil0808]

The whole buyout price was paid out in two installments as a dividend, one part was non-taxable as it was considered a capital return and, the other part (profit) was a taxable dividend. The dividend was shared by the shareholders according to the number of shares owned, regardless whether it was common shares or preferred shares.  Everyone was paid at the same rate for the shared owned. We

[sorrenson]

in our case it is $ 500 million, at this moment). Ridiculous .  the fair purchase price of the company is 75 cents to a dolllar   . It is based on current share price not your fantasies  or lottery dreams