Bolstering its defence against a $1.6-billion takeover bid by the Sherritt Coal Partnership II,
Fording says the cash, which will accompany one trust unit for each share tendered, will help shareholders pay any taxes associated with the conversion.
Fording intends to provide details of its conversion plan in late November, and shareholders will vote on the proposal on Dec. 20. Only shareholders of record on Nov. 19 will be entitled to vote.
In part to cover the cost of the cash sweetener, Fording has negotiated $425 million worth of replacement bank facilities with RBC Capital Markets. Currently, Fording has more than 50.6 million issued and outstanding shares.
Fording says its plan to convert to an income trust will “unlock value for shareholders, provide a continued platform for growth, and maintain a sound and flexible financial position.”
Fording, Canada’s largest producer of export-coal, continues to recommend that shareholders reject the Partnership’s $29-per-share offer, which was launched in mid-October. The Partnership is an alliance between
The Partnership’s offer expires Dec. 27.
Fording’s shares were trading 10 higher at $32.10 in Toronto at mid-day on Nov. 13. Shares of Sherritt were off a penny at $4.20.
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