The board of Ashton Mining of Canada (ACA-T) has come out swinging at bidder Stornoway Diamond (SWY-T), calling Stornoway’s offer to buy Ashton “opportunistic and coercive.”
The directors recommended that shareholders should “take no action at this time,” and said that the board’s special committee — independent directors Pierre Lebel and David Watkins, and Ashton chairman John Cole — would have an opinion on the bid whenever Stornoway issued formal bid documents.
Stornoway is bidding $1.25 cash or one Stornoway share plus 1 for each Ashton share, and has arranged for Ashton’s majority holder Rio Tinto (RTP-N, RIO-L, RIO-A) to tender its 52% interest in the company, held by two subsidiaries, to the bid. Concurrently, Stornoway is pursuing a friendly deal with Contact Diamond (CO-T) to exchange Contact shares for 0.36 of a Stornoway share.
Agnico Eagle Mines (AEM-T, AEM-N), Contact’s largest shareholder, is partly bankrolling the Stornoway bid by taking a $22.5-million private placement in Stornoway shares.
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