TORONTO (miningweekly.com) – Ontario-based Zara Resources’ simultaneous takeover offer for three resource juniors was on Monday cease-traded by the Québec Bureau de décision et de révision (BDR) on the grounds that a lack of French-language shareholder information invalidated the takeover process.

TSX-V-listed Visible Gold Mines earlier this month filed an application with the Quebec authority and sought a cease-trade order and other sanctions against the unsolicited offer, which Zara launched on August 19. Zara sought to simultaneously buy out the issued share capital of Altai Resources, Greencastle Resources and Visible Gold Mines.

“Zara’s novel and innovative multiple bids engaged the interest of the AMF (Autorité des marchés financiers) and defensive arguments from three teams of expensive lawyers from the targets, Visible, Greencastle and Altai. Zara was nearing completion of the translation processes at the time of the hearing,” Zara chairperson and CEO Danny Wettreich said in a statement.

However, while the company’s takeover bids were temporarily put on ice, Zara said it would file complete French versions of the takeover offers after the BDR and AMF had reviewed the documentation.

“Upon re-filing, the offers will be extended and shareholders of all target companies will be notified of the new expiry date in due course,” Wettreich said.

As a result of the cease-trade order, Zara could not take up any shares from the three target companies that might have been tendered in response to its offer, nor issue any Zara shares in payment for the tendered shares.

Visible Gold said the BDR specifically noted that the Zara bid did not comply in important respects with applicable securities laws; that the Zara circular was incomplete and that the Zara circular did not permit the shareholders of Visible Gold Mines to make an “enlightened decision” in determining how to respond to Zara's offer.

The BDR had also ordered that Zara and its agents stop communicating with or soliciting the shareholders of the three target companies in connection with the offer, until it translated its bid documents into French, amended and corrected its bid documents, and staff of the AMF were satisfied with the amended and corrected disclosure.

Zara offered to acquire Visible Gold at a price of C$0.05 a share, to be paid by issuing 0.4167 shares of Zara in exchange for each tendered Visible share. Based on the most recent trading price of Zara, at C$0.12 a share, and of Visible, at C$0.015 a share, prior to Zara's recent offer for 19.9% of Visible, that is a premium of 233%.

Zara also offered to acquire Greencastle Resources at a price of C$0.14 a share to be paid for by issuing 1.1667 shares of Zara in exchange for each Greencastle share tendered. Based on the most recent trading price of Zara, at C$0.12 a share, and of Greencastle, at C$0.06 a share, that is a premium of 133%.

Altai Resources shareholders would receive C$0.17 a share, payable by 1.4167 shares of Zara for each Altai share. Based on Altai’s recent price of C$0.085 a share, this is a premium of 100%.
Zara is developing its Forge Lake gold project and its Pigeon River nickel/copper projects in Ontario.