Court blocks Rusoro takeover bid for Gold Reserve

The Ontario superior court has issued an injunction stopping the hostile takeover bid by Rusoro Mining (RML-V, RMLFF-O) for Gold Reserve (GRZ-T, GRZ-X).

In a statement, Gold Reserve says that the court has granted it an interlocutory injunction restraining Rusoro Mining from proceeding with its hostile takeover bid to acquire the shares of Gold Reserve, until the conclusion and disposition at trial of the action started by Gold Reserve.

According to Gold Reserve, the court accepted its motion on the basis that Rusoro had access to, or benefited from, the use of Gold Reserve’s confidential information as a result of Rusoro’s relationship with Endeavour Financial International (EDV-T).

Gold Reserve says that the court has also issued a second injunction, restraining Endeavour from having any involvement with the hostile takeover bid.

Finally, the court required that Rusoro and Endeavour return to Gold Reserve all the confidential information of Gold Reserve, and anything produced from that confidential information.

Gold Reserve’s statement says that the company is satisfied with the court’s ruling. “We remain committed to ensuring that our shareholders receive full value for their investment,” says Doug Belanger, the company’s president.

In December, the Gold Reserve board voted unanimously to reject the hostile takeover bid, and recommended that shareholders reject the offer.

The company says that Gold Reserve shareholders who have already tendered their shares to the Rusoro offer, do not need to take any action, since Rusoro is obliged to return their shares.

Gold Reserve holds the rights to the Brisas gold/copper project and the Choco 5 gold exploration property in Venezuela (T.N.M., Feb. 2-8/09).

Following the injunction, George Salamis, Rusoro’s president, has issued a statement announcing the withdrawal of the takeover bid.

The next step in the Rusoro / Gold Reserve takeover saga was scheduled to occur on Feb. 12. Rusoro was planning to apply to the Ontario Securities Commission (OSC) to cease trading Gold Reserve’s shareholder rights plan (commonly known as a “poison pill.”) However, in view of the injunction, Rusoro will not proceed with the OSC hearing.

Shares in Gold Reserve closed down 4¢ to $1.24 on the TSX, while Rusoro shares were unchanged at 74¢ on the TSX Venture exchange.