Ashton board agrees to new merger plan

A proposal from Stornoway Diamond (SWY-T, SWYDF-O) to merge Ashton Mining of Canada (ACA-T, AMCFF-O) into one of its wholly owned subsidiaries has met the Ashton board’s approval.

The move would allow Stornoway to complete a takeover it started in July, which ultimately gave it a 75.6% interest in Ashton. It appointed its own nominees to the Ashton board in November.

The proposal would give holdout Ashton shareholders the same consideration they would have received under the takeover bid, either one Stornoway share and 1, or $1.25 in cash. The cash part of the bid is limited to $13.6 million, and shareholders tendering for cash would receive shares pro-rated to their holding.

Independent directors of Ashton (including David Watkins and Bernard Coulombe, who remained when Stornoway replaced Ashton management on the board of directors) retained legal counsel and engaged Sprott Securities for a valuation. Sprott’s conclusion was that Ashton was worth between 91 and $1.35 per share.

The proposal is an amalgamation, rather than a buy-out, so Stornoway has asserted that it can vote its shares in favour of the proposal. A shareholder vote on the matter would need two-thirds of shares in favour for the proposal to go ahead, a requirement Stornoway can meet on its own.

Print

Be the first to comment on "Ashton board agrees to new merger plan"

Leave a comment

Your email address will not be published.


*


By continuing to browse you agree to our use of cookies. To learn more, click more information

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.

Close