An agreement concluded earlier this month between Rio Algom (TSE) and Teck Corp. (TSE) which would see Lornex Mining (VSE) discontinued as a public company is said to be facing opposition by at least one Lornex minority shareholder.
The shareholder, who has brought proceedings before the Supreme Court of Ontario, is arguing that the proposed merger should not proceed without the consent of minority shareholders. A declaration will be sought from the court stating that the amalgamation is not permitted under the Ontario Business Corporations Act.
The take-over offer, made earlier by Rio Algom and Teck, is to purchase all of the 614,343 issued and outstanding common shares of Lornex held by minority shareholders at a price of $75 per common share.
Trading in the common shares of Lornex is currently on a cash basis only. The take-over may result in the company no longer meeting the listing requirements of the Vancouver Stock Exchange, and therefore could result in the delisting of the company’s shares upon completion of the offer.
A meeting of Lornex shareholders has been called for Dec 28 to consider and vote on the proposal.
Rio Algom says Lornex no longer has any active operations and over the last few years has essentially become a holding company with management of its holdings provided by Rio Algom.
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