Ivernia Inc IVWFF

Griffin Withdrawal

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The language used by Griffin in both their original takeover announcement and their subsequent withdrawal of the offer is rather misleading or, at the very least, confusing. The original announcement seemed to say that Griffin would be paying for the shares and retiring all outstanding debt obligations. They went into a lot of detail about the costs of debt retirement and about the recent changes in the terms of notes payable by IVW. One of Griffin’s “conditions” in the original announcement was that IVW’s shareholder rights plan must be waived and another condition was the “withdrawal or defeat by shareholders of IVW’s proposed refinancing.”

In today’s announcement Griffin opens by saying it is withdrawing the offer “as a result of actions taken by the board of IVW.” It goes on to say that IVW did this without “allowing the shareholders to be given the opportunity to consider a number of alternative proposals put forward by Griffin.” To my knowledge IVW  made all of the financial commitments that Griffin is objecting to before Griffin made its offer, not the other way around.

Griffin also says today that IVW’s application to the TSX for the refinancing was made “notwithstanding that Griffith had advised of its intention to make an offer to purchase all of the outstanding shares at a 25% premium to market” etc.

So my interpretation of all this is that Griffin is saying that it advised IVW management that Griffin intended to make an offer at a 25% premium to market (around 15 cents) and Griffin is implying that IVW reacted to that news by promptly striking a deal with Sentient that is unfavorable to IVW shareholders and that might have violated some regulatory rules. Griffin also seems to be leaning on the “death spiral” provision as being a very significant feature of the refinancing that was unknown to Griffin and is a deal breaker now that Griffin has become aware of it.

I am still of the understanding that all of the dilution that Griffin keeps referring to will only take place if IVW fails to make loan repayments on time and Sentient enforces the terms of the loan. Would someone on this board please confirm that this is the correct interpretation? Griffin’s language seems to imply that the dilution is a certainty and it is being done to the detriment of shareholders in an underhanded fashion.

If my reading of all of this is correct it seems to me that, as I wrote a  few days ago, Griffin is an opportunistic predator trying to grab assets at a fire sale price at a time when IVW is just coming out of a long list of problems. Griffin might have been given a clear message in the last few days that they would not receive nearly enough shares in response to their lowball offer to make the whole exercise worthwhile. Nothing in today’s announcement, it seems to me, says anything about new information that would be significant enough to cause a change of Griffin's plan.