PERTH, Australia, Sept. 06, 2021 (GLOBE NEWSWIRE) — Wyloo Metals Pty Ltd (“Wyloo Metals”) confirms it submitted an Arrangement Agreement to the Board of Noront Resources Ltd (TSXV:NOT) (“Noront”) for consideration on September 3, 2021. In submitting the agreement, Wyloo Metals calls upon the Noront Board to act in the best interest of shareholders and progress the formalization of Wyloo Metals’ superior proposal in line with its fiduciary obligations.
Wyloo Metals restricted on due diligence
Wyloo Metals received a revised confidentiality agreement from the Noront Board on August 31, 2021. Wyloo Metals was surprised to learn that the removal of the standstill provision required the consent of BHP Western Mining Resources International Pty Ltd. (“BHP”). The Noront Board was aware of Wyloo Metals’ objections to the standstill given the adverse and inappropriate restrictions such a provision would place on Wyloo Metals as an existing shareholder. By granting BHP this consent right to control the terms on which Wyloo Metals can access due diligence information, the Noront Board continues to frustrate a clearly superior offer for its shareholders.
While BHP may have consented to the removal of the standstill provision, unfortunately, Wyloo Metals and Noront have been unable to agree on a form of the confidentiality agreement that preserves Wyloo Metals’ unrestricted freedom to communicate directly with shareholders. BHP’s consent continues to be required. Despite this obstacle and its inability to conduct confirmatory due diligence, Wyloo Metals remains committed to delivering the best result for Noront shareholders. While Wyloo Metals’ preference would be to conduct confirmatory diligence as would be customary, rather than subjecting itself to a gag order, Wyloo Metals intends to proceed directly to the finalization of transaction documentation.
Clarification of misleading comments from Noront
Wyloo Metals would like to clarify a misleading comment made by Mr. Alan Coutts, President and CEO of Noront, in an article published by Northern Ontario Business on September 4, 2021. In the article, Mr. Coutts suggests that the inclusion of the standstill provision is to ensure Wyloo Metals does not “go out and buy stock on the market based on what [Wyloo Metals] may or may not see in the data room”. Mr. Coutts and the Noront Board would be fully aware that Wyloo Metals cannot purchase any shares in Noront in the open market without triggering the Shareholder Rights Plan (i.e. poison pill defense), adopted by Noront on May 27, 2021. Rather, the primary purpose of the standstill clause appears to be to prevent Wyloo Metals from submitting an acquisition proposal directly to shareholders, advocating for changes to the Noront Board or publicly communicating directly with Noront shareholders without the approval of the Noront Board. Given the Noront Board’s track record of favoring BHP as a counterparty to a transaction, Wyloo Metals could not accept such a standstill clause.
Head of Wyloo Metals Luca Giacovazzi said, “As we have shown from day one of this process, Wyloo Metals is fully committed to working quickly and collaboratively to formalize a binding superior proposal for the benefit of Noront shareholders. However, we cannot allow our proposal to be subject to inappropriate restrictions from the Noront Board, particularly given that our proposal calls for the Board’s replacement.”
Additional
benefits to Noront directors and officers
Wyloo Metals is disappointed by Noront’s continued public support of BHP’s Cdn$0.55 per share offer considering Wyloo Metals has made a clearly superior C$0.70 per share proposal. Wyloo Metals therefore requests that Noront directors and officers disclose the full details any benefits afforded to them by BHP that will not be made available to ordinary shareholders, including any early exercise or vesting of options and/or share rights, change of control payments, future employment opportunities and any other arrangements with BHP.
Wyloo Metals’ proposed Arrangement Agreement does not contemplate the early exercise of options or share awards of Noront directors or officers. Such options and share awards will survive on the same terms and conditions as they would have done prior to the transaction, as specified in Noront’s existing option plan and share award plan.
Wyloo Metals notes the lock-up agreements entered into by certain directors and officers of Noront, in support of the BHP offer, assume certain options or share awards exercise earlier than they otherwise would according to Noront’s existing option plan and share award plan. These options and share awards, some of which were issued as recently as April 2021, are not being exercised in the ordinary course of business but as a direct result of the BHP offer. The resulting shares would be tendered in favor of the BHP offer, to the direct financial benefit of the Noront directors and officers that own them. At BHP’s offer price, the gross monetary value of these converted options and share awards is approximately Cdn$10 million dollars and represents a substantial benefit for those Noront directors and officers.