Vancouver – Unable to stomach bcMetals‘ (C-V, BMTLF-O) poison pill, Imperial Metals (III-T, IPMLF-O) has withdrawn its unsolicited 95-per-share bid for the junior.
In its decision Imperial cited “certain risks and uncertainties” that would arise from bcMetals’ shareholder rights plan. Under the mechanism adopted by bcMetals’ board of directors in mid-October, any person or group acquiring more than 20% of the company’s shares would trigger a provision allowing shareholders to purchase additional shares at a 50% discount to market price thus causing significant stock dilution and make the takeover more costly.
With about 6.9 million shares (about 18.1%) of bcMetals already tendered to Imperial, the company was close to triggering the poison pill. The company also confirmed it is proceeding with a British Columbia Securities Commission (BCSC) application seeking an order to cease trade any bcMetals securities issued under the shareholders rights plan.
Imperial intends to honour its purchase commitment for all shares deposited under its bid, however bcMetals has recently filed its own BCSC application seeking an order to restrain the company from taking up and paying for shares citing certain withdrawal right issues.
The move now leaves Taseko Mines (TKO-T, TGB-X) as sole bidder for bcMetals with its planned $1.05 per share offer.
bcMetals hopes to convince shareholders to vote in favour of a planned alliance with Hong Kong-based Global International Jiangxi Copper Mining (GIJCM), forming a limited partnership for development of the Red Chris copper-gold porphyry deposit near Iskut in northwestern British Columbia.
The GIJCM agreement would see bcMetals holding a 25% free-carried interest in the partnership for contributing Red Chris while the Chinese company will acquire 75% for contributing US$105 million and entering into an offtake agreement to purchase all produced concentrates from the proposed mine.
Shares of bcMetals closed even at $1.00 apiece following Imperial’s pulled offer.
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