Placer Dome (PDG-T, PDG-N) said late on Wednesday that following 2 days of initial review, it has set up a special committee of independent directors to evaluate Barrick Gold‘s (ABX-T, ABX-N) unsolicited US$9.2-billion takeover offer.
The committee will be chaired by Robert Franklin, chairman of Placer, and includes Donald Carty, John Crow, Graham Farquharson, Vernon Taylor and William Wilson. The committee will be backed by financial advisors CIBC World Markets and Morgan Stanley & Co., and Canadian legal counsel Osler, Hoskin & Harcourt and Simpson Thacher & Bartlett in the U.S.
The special committee will also examine the company’s alternatives and make recommendations to the board.
“Once formal offer documents are received, the board will be in a position to give Barrick’s proposal further consideration and, in due course, communicate its views to shareholders,” said Franklin in a press release.
Placer also says it will inform Barrick of the fact that more than 40% of its outstanding shares are held by U.S. investors. That means, Placer believes, that Barrick would not qualify for filing documents relating to the offer with the U.S. Securities and Exchange Commission (SEC) on Form F-8, as Barrick plans.
Placer says it believes that any exchange offer by Barrick will be subject to the U.S. exchange offer rules and subject to review by the SEC.
In related news, Bloomberg reports that the SEC has launched an investigation into whether insiders had confidential information when they bought US$1.9 million worth of Placer call options on Oct. 25 and 26, and were set to expire in two weeks. Barrick launched its US$20.50 cash-and-share bid, which if successful would beget the world’s largest gold producer, on Oct. 31.
The SEC is looking for the court to prohibit the unknown purchasers from exercising the options, impose civil penalties, and issue an order restraining them from further violations of U.S. fraud laws.
The securities were purchased through Geneva-based Banque SCS Alliance SA.
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