The application by Ashton Mining of Canada (ACA-T, AMCFF-O) to have the British columbia Securities Commission issue a cease-trade order against Stornoway Diamond (SWY-T, SWYDF-O) has failed.
Ashton was seeking a cease-trade order against the takeover bid mounted by Stornoway on July 24, originally on the ground that Stornoway, having reached a lock-up agreement with Ashton’s majority shareholder Rio Tinto (RTP-N, RIO-L, RIO-A) that included a $2-million break fee, had not offered identical consideration to all shareholders.
Stornoway and Rio agreed on the weekend that the break fee, originally payable to Rio only, would instead be distributed to all Ashton shareholders if Stornoway backed off its bid. That left Ashton’s application resting only on a broad principle that majority shareholders should not reach lock-up agreements with takeover bidders.
The Commission said it would release its reasons for the decision shortly.
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