The Toronto Stock Exchange has thrown cold water on a plan by Pegasus Gold Inc. (TSE) to protect itself from any unwelcome takeover attempt (N.M., Dec 12/88). The TSE has told Pegasus that its “poison pill” plan must be approved by shareholders at the next annual meeting rather than just its board of directors.
President James Foreman, said that holding a special meeting would be costly but he confirmed it could be lumped in with the company’s annual meeting next year. He argued that the reason given by the TSE for the decision “is not valid legally” and he confirmed that further discussions are planned with the exchange to resolve the situation.
“The TSE is not the jurisdictional authority on the plan at all,” he emphasized, adding that several United States’ companies on the TSE have adopted “more rigorous kinds of pills” that Pegasus wouldn’t support.
Foreman denied the Pegasus poison pill tactic relates to the fact that Northgate Exploration (TSE) has taken a large share position in Spokane-based Gold Reserve, a major shareholder in Pegasus. “That’s not the reason at all,” he said, adding that Pegasus had about 540,000 shares of Gold Reserve and “we would like them to be successful.”
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