OTTAWA,ON -- Financial Press -- Michael Bailey today announced his intention to initiate an "any and all" tender offer for the outstanding shares of common stock of Nautilus Minerals at $1.10 per share in cash. The tender offer price represents a premium of approximately 86% over the stock's closing price on January 9, 2012 (the trading day immediately prior to this announcement), which was $0.59. Mr. Bailey also announced his intention to nominate a slate of directors for election to the Nautilus board at the upcoming annual meeting.
The tender offer will not be subject to due diligence or financing or any minimum tender condition but will be subject to the election of Mr.Bailey's nominees to the Nautilus board at the upcoming annual meeting so that Mr. Bailey's proposed nominees, if elected, can remove impediments to the companies operation under PNG law.
The tender offer will have an initial expiration date of 35 days following commencement. We urge you to tender your shares promptly. If we receive at least 25% of the outstanding shares tendered prior to the initial expiration date, we believe this would indicate that we would have an excellent chance of prevailing in our proxy contest.
Therefore, at that time, if we receive that level of support for our tender offer, we will extend the offer and seek proxies to elect our slate of nominees at the upcoming annual shareholders meeting.
If, at any time, we receive tenders of 40.1% of the shares (which when added to the shares already held by Bailey will equal 50.1%), we will demand that the current board, in accordance with its fiduciary duty to stockholders, accelerate the upcoming annual meeting to allow the prompt election of our slate of directors so that the tender offer can close quickly. In that regard we note that we are willing to engage in negotiations with Nautilus immediately in order to obtain its support for the offer and facilitate closing on an expedited basis.
The tender offer will include withdrawal rights so that a tendering shareholder can freely withdraw any shares prior to the acceptance of such shares for payment under the tender offer. We urge shareholders to tender shares and send a very strong message to Nautilus management of the desire of shareholders to accept our offer and close promptly.
Mr. Bailey has completely lost faith in the board representation citing last month's quarterly report filing and in an effort to correct what we consider to be long standing problems facing Nautilus, problems that we believe have contributed to a value gap between the stock price and the value of the assets. After the the termination of Equipment Build for Solwara 1 Project last month, management of Nautilus has made lofty promises reminiscent of a politician's campaign promises. However, it appears to us that instead of any true progress towards unlocking shareholder value, the company has only presented a combination of slogans and aggressive long term projections showing that profitability will increase over the next several years, assuming the Government of PNG can finance the JV. In our opinion, management has repeatedly refused to take any strategic alternatives seriously, claiming only to quietly "study" options internally while they burn cash reserves.
Mr. Bailey stated, "It has become very clear to me that the management has taken a passive attitude to the future of this company, willing to sit back and watch what happens with the Government of PNG, hoping for a positive outcome that may never come. They have suggested that shareholders should be willing have increased expenses with the new delays that they have caused , and wait another four years to see if the underwater mining business will be viable on its own, or if it will become an anchor and drag down the entire company. I strongly believe that Nautilus Minerals needs proactive shareholders to bring a proactive management team together to weather a volatile government relations, execute a plans to begin production in the underwater gold mining industry"
Mr. Bailey continued, "Nautilus' cash reserves have been depleted from $149M to 90M during the building of the Solwara 1 project. It took management almost three years to develop a viable operating plan to improve performance, and now they seem to expect shareholders to wait until 2016 or indefinitely with no proposed start date for the equipment build to restart which is currently %53 complete to see results. We believe that mismanagement of this company has resulted in a lost half decade of shareholder value. Apparently, management would like shareholders to ignore this 4 year long track record along with the mismanagement of the world's first underwater 43-101 resource, and overestimating the financial wherewithal of the Government of PNG. Instead they are asking shareholders to focus on 2016 projections contingent on a global economic boom. We believe that management should be focusing on how best to drive value to shareholders immediately."
Mr. Bailey previously announced intentions of a hostile bid, however thanks to the overwhelming support for his hostile bid from significant existing shareholders and multiple fund managers he will be seeking a control of the board of directors. The change in the offer will also will increase the Tender Offer from $0.97 per share to $1.10 per share .
NOTICE TO INVESTORS
MICHAEL BAILEY 'S AFFILIATES HAVE NOT YET COMMENCED THE TENDER OFFER REFERRED TO IN THIS PRESS RELEASE. UPON THE COMMENCEMENT OF ANY TENDER OFFER, THESE ENTITIES WILL FILE A TENDER OFFER STATEMENT. THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TENDER OFFER AND SHOULD BE READ BY SECURITY HOLDERS. WHEN THE TENDER OFFER IS COMMENCED, SECURITY HOLDERS WILL BE ABLE TO OBTAIN AT NO CHARGE (I) THE OFFER TO PURCHASE AND ALL RELATED DOCUMENTS FROM THE OFFEROR.
SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY MICHAEL BAILEY , AND CERTAIN OF THEIR RESPECTIVE AFFILIATES FROM THE STOCKHOLDERS OF NAUTILUS CORPORATION FOR USE AT ITS 2013 ANNUAL MEETING WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY SOLICITATION. WHEN COMPLETED, A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY WILL BE MAILED TO STOCKHOLDERS OF NAUTILUS CORPORATION AND WILL ALSO BE AVAILABLE AT NO CHARGE.