Reverse Takeovers I am suspicious that we may have a reverse takeover offer for BNC about to be announced. BNC's press release announcing the new Chairman talked about his experience managing a reverse takeover where he secured a multiple of the stock price at the time for existing shareholders. BNC controls the message in their PR, so why would they say that? And why get an independent chairman now. And why do a series of investor shows, starting with Vancouver tomorrow?
I read about reverse takeovers in Wikipedia. I encourage you to read it, but it roughly says a private company buys a public company, often as a fast way for the private company to go public. The private company shareholders contribute their shares to the public company (BNC) at an agreed-upon price for the BNC shares. This price could be many times higher than current market for BNC because the combined entity could be very valuable. Particularly if the private company brought with it a substantial US presence and a major sales force, or a lot of cash.
Why get an independent chairman now? Well, Graeme and the Board would have a hard time issuing a convincing fairness opinion to the shareholders if Graeme were both CEO and Chairman. Why do a roadshow starting tomorrow in Vancouver? Well, BNC doesn't know who all their shareholders are, so they have to do a broadcast and hope it reaches the right guys.
By the way, I recommend that everyone compare the list of departing VPs to the list of insiders who sold shares last year after exercising their options. The lists are similar. Probably just a coincidence.