Australian company SolGold on Friday expressed its frustration at the rejection of its planned bid for Canadian firm Cornerstone – a company that holds 15% of the Cascabel copper/gold project in Ecuador.
Cornerstone rejected the intended offer meant to consolidate SolGold’s ownership in Cascabel in record time. It took Cornerstone less than three hours to dismiss SolGold’s intentions in a press release lodged with the TSX at 09:52 EST.
“Was there time that early in the morning to actually make contact with the shareholders representing more than 50% of those outstanding? Did Cornerstone have time to hold a board meeting to consider the offer between the time board members woke up in the morning and the time the press release was issued?,” LSE- and TSX-listed SolGold questioned on Friday.
The all-stock transaction of 0.55 a share for every Cornerstone share is a 20% premium to the takeover target’s share price. When it first announced the proposed transaction on January 31, SolGold said that it had felt, for some time, that the consolidation of ownership of the Cascabel project into a single listed entity made “eminent sense” to simplify the structure and to remove the risk of dilution for Cornerstone shareholders.
SolGold said that it had approached Cornerstone in 2017 and in 2018, but that the Canadian company had indicated that it would only engage in negotiations if 50% of the seats on the board of directors of the combined entity were allocated to Cornerstone and if CEO Nick Mather and chairperson Brian Moller were replaced.
The company stated that it intended to proceed with its offer.