RE:The end, per Will P.? Here is the entire blog from Will tonight:
Eric Friedland and Tom Peregoodoff's Peregrine Diamonds Ltd. (PGD) closed unchanged at 23.5 cents on 188,000 shares. It has been chained at that price since De Beers Canada made a friendly offer to buy the company's stock at 24 cents in mid-July. The bid annoyed many of the company's retail shareholders, but it was not unexpected: Peregrine had been seeking a way to break its cycle of 10-cent rights offerings to pay for big -- but not big enough -- exploration programs its Chidliak project on Baffin Island. Despite its grumpy shareholders, new details suggest that Peregrine got the best deal it could arrange.
Peregrine had completed two previous rights offerings, one in the summer of 2014 and the next in early 2016, each generating howls from the company's (not so) faithful lesser shareholders. In the hope of avoiding a third, Mr. Peregoodoff, Peregrine's president and chief executive officer, and Mr. Friedland, executive chairman, ramped up their efforts to find help for the Chidliak project. Early in 2017, Peregrine signed confidentiality agreements with three "interested parties." (Interested parties abound on Howe Street, but few are companies with the wherewithal to explore for diamonds in Canada's North.)
One of the parties, De Beers Canada, approached Mr. Peregoodoff that summer, wondering if Peregrine might be interested in "exploring a possible entry" by De Beers into the Chidliak project, through a joint venture arrangement. Later that summer, Mr. Peregoodoff and Mr. Friedland met with De Beers Canada, providing it with publicly available technical data. (By then, Peregrine had already completed its third rights offering, raising another $10.3-million at 10 cents to escalating howls of displeasure.)
Some of the data was probably familiar to De Beers. In 2012 it had acquired an option to earn a 50.1-per-cent interest in Chidliak, in exchange for a $58.5-million investment into Peregrine and the project. The following year, De Beers declined to pursue its option further. De Beers must have liked what Peregrine accomplished on its own over the past several years, as in the late summer of 2017, it signed a confidentiality agreement with Peregrine to gain access to the rest of the Chidliak data.
De Beers was still poring over the confidential data that fall, when a second of the three interested parties gained access to the confidential data. (The third party was also still interested, just not as much as De Beers and its unnamed rival.) That changed early this year: In February, with Peregrine champing at the bit to put together a big 2018 exploration program, Mr. Peregoodoff had to tell his board that De Beers was the only party still interested in talks. In March, De Beers wrote to Peregrine, saying that it wanted to complete detailed due diligence investigations, adding that a formal proposal would follow.
Peregrine's crew assumed -- correctly as it turned out -- that the formal proposal might involve more than a joint venture arrangement, so they set in motion the company's internal work that would be required under such a circumstance. De Beers confirmed in early spring that it was contemplating a possible takeover bid, and in mid-April, it made an initial proposal, offering 20 cents per share.
Peregrine was still waiting on a revised preliminary economic assessment of the project. Further, it believed that Mr. Friedland and his brother, Robert Friedland, who owned nearly half the company's stock, would not agree to the offer. Therefore, Mr. Peregoodoff told De Beers that while its offer was "not sufficiently compelling," it agreed to keep talking. In mid-June, De Beers upped its offer to 24 cents per share, sufficiently compelling to Peregrine and the Friedland brothers that Mr. Peregoodoff and De Beers pulled together the friendly arrangement in less than a month. Shareholders will pass judgment on the offer at a special meeting on August 31st