Door is wide open for a takeover
After reading the documents, there is nothing stopping a takeover.
Management is permitted to continue discussion of a takeover.
Realization of losses can be used by buyer.
No dilution for current shareholders.
Current Stock options to be wipe out after the deal.
New stock option plan after deal (reset to zero).
Fairness opinion from Desjardin is limited to "financing" option (equity, debt and other tax scheme). Excludes licensing, partnership and takeover or other business strategy.
Other variable:
Not sure but I think that Thallion is now in Black out period (will confirm with IR)....
My take:
We now know that TLn was unhappy with the price received and opened the strategic review to get alternatives to takeover.
Premium brand showed up. Choose TLN over others.
Premium deal is a once in a lifetime opportunity. There won't be any other tax conversion opportunity like this.
IF buyers decices to buy now, price is partially set:
Price for TLN is now set 32 millions shares + 2,4 millions options (under old stock option plan).
Warrent are exercisable at 3,7$ per warrant... (so warrants are worthless...)
8 millions extra cash from tax conversion (Premiun deal permits this)
If buyers buy later...
Will pay more for shares after GBM results
Management could issue themselves 3.2 options under new stock option plan at lower price and buyer would have to assume more....
However, Buyer will still get the 8 million cash from tax converion
Price will be much more hefty after tax conversion due to GBM results and 3.2 options under new plan at cheaper exercise levle.
Since stock option is reset to zero, this deal is most detrimental to option holders ie management, especially Falardeau ( which hold the most options).
I am speculating that a take over is close and could arrived before Arrangement closure. In that optic, deal would benefit all ( including current option holders).
IF the is no take over on the table, Falardeau will be the biggest loser being the biggest option holder. I don't think this guy is an idiot. I don't he leaving and letting go everything.
I think he knows that deal is imminent and he will exercise his options on deal day.
Otherwise, under new thallion, old option holders are wipe out (less dilution for us shareholders).
Waiting for strategic review update...
This will confirm what I just wrote.
IF so, we can all add at least another 0,10 to stock price as market will price in Take over premium.