RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:REJECTED!!!Went back and reviewed Svm and Guy Agreement and the Guy's announcement of the rejection of the GCM offer.
A lot of fellow GCM shareholders already commented so will keep my thoughts as brief as possible:
- The "Arrangement Agreement" is a simply the formalized negotiations between Svm and Guy and includes Guyana Board's recommendation in favour the transaction.
- The actual deal will depend on the voting results in a special meeting on June 29;
- The porposed transaction needs the approval of 66% of cast votes;
- There are approximately 175 million outstanding Guy shares;
- Institutional shareholders hold approximately 53% of the share float;
- retail shareholders own approximately 43% of the share float;
- Guy management and Board own the rest which is less than 5 percent;
- Pension funds and hedge funds represent significant portion of the institutional investors;
- Whether a hedge fund or a Canadian pension plan would be influenced to vote in favour of the proposed transaction remains to be seen;
- Regarding the Guy rejection of the GCM offer, one of the question was can the Board decide unilaterally without discussing with shareholders. In their announcement Guy stated that the Board reviewed the GCM offer 'after consultation with their financial advisors and lawyers". I think this Board decision without consulting with Guy shareholders is problematic. The GCM offer could have been included in the agenda for the June 29 special meeting: Item #1 - voting resolution regarding the proposed Svm-Guy transaction and item 2 - voting resolution in favour of the unsolicited GCM offer.
The rejection of the GCM offer by Guy means that if Guy fails to secure 66% approval of the proposed transaction, then 5% of Guy shareholders could force another special meeting and another vote of the Gcm offer.
I think that the best course of action for GCM is to wait and see the outcome of June 29 vote. Given the highten publicity, particularly, the GCM's superior offer, I expect higher than normal voting participation on June 29. If 75% of eligible shares are voted, the 66% approval threshold means that Guy needs 85+ million shares to close the deal with SVM.
As I see it the outcome will ultimately depend on how majority of institutional investors will cast their vote.