The absence of a French version of an unsolicited
Zara Resources takeover bid of Visible Gold Mines (
TSX:V.VGD,
Stock Forum) “violates a fundamental rule of Québec securities law and makes the offer illegal”, according to
a statement from the Quebec-based operation.
The language issue is one of three rationales Visible is pushing as reason to cease trading on their stock, as well as justification for other penalties.
“Visible Gold Mines has also noted the sale by Mr. Danny Wettreich, CEO and principal shareholder of Zara Resources (
CSX:C.ZRI,
Stock Forum), of almost 2 million Visible Gold Mines shares on August 19, 2013, the day on which Zara Resources first announced its offer. Visible Gold Mines considers the sale to be in direct contravention of applicable securities laws,” continued the statement.
It continues,” The application by Visible Gold Mines also invokes the failure by Zara Resources to adequately disclose in its take-over bid circular that Zara's offer to acquire 100% of the outstanding shares of Visible Gold Mines is independent of the simultaneous offers made by Zara Resources for 100% of the shares of two unrelated mining exploration companies, and is not conditional upon the success of the two other offers.”
Zara’s offer specifically outlines the fact that the company is involved in three takeover bids, something it considers an ‘innovative’ approach.
“Each of the three bids offers a substantial premium over market prices,” said the company in an earlier statement announcing the offer. “Single circular for three simultaneous takeover bids is a unique, innovative, highly cost-effective offering approach that affords target company shareholders the ability to evaluate their investment not only against the current Zara, but the greatly enhanced proforma Zara that combines the four companies.”
Visible management have requested a hearing before the Québec Bureau de Décision et de Revision, and have advised shareholders to defer accepting the Zara-for-Visible share offer.
Zara describes its business concept as being “to acquire small-cap companies with under-valued or poorly managed assets and bring a disciplined management focus to unlock asset value and establish a natural resource company focused on creating value for shareholders.”
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