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GreenBank to Acquire 15% of Veterans Financial Group

Toronto, Ontario, August 14, 2017 – GreenBank Capital Inc (CSE: GBC and OTCMKTS: GRNBF) ("GreenBank or the Company") announces that GreenBank has agreed to acquire 15% of Veterans Financial Group LLC (“Veterans”), a Portsmouth, Ohio, USA based insurance agency providing insurance services to veterans, families and businesses. GreenBank will pay $57,000 for a 15% interest in Veterans, payable $25,000 in cash and $32,000 by the issuance of 32,000 $1 Non-Voting 5% Preference Shares Series C. ...

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GreenBank Updates Its Merchant Banking Focus and Seeks To Make Further Small-Cap Investments

Toronto, Ontario, August 1, 2017 – GreenBank Capital Inc (CSE:GBC and OTCMKTS:GRNBF ("GreenBank or the Company") announces that it has completed an internal review of its merchant banking activities and reaffirms that its continuing focus will be the further development of its investment portfolio and its merchant banking business. GreenBank is seeking other small-cap investment opportunities, and welcomes approaches from aspiring private companies. During the last six months, and upon the completion of the proposed distribution ...

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GreenBank Signs Letter of Intent to Acquire 14% of Slabdeck

Toronto, Ontario, July 27, 2017 – GreenBank Capital Inc (CSE:GBC and OTCMKTS:GRNBF) ("GreenBank or the Company") announces that it has signed a Letter of Intent (“LOI”) to acquire 14% of Slabdeck Technology Inc (“Slabdeck”), a Canadian company that owns 100% of Slabdeck, a unique comprehensive all-in-one search mobile application that integrates social search, discovery and communication. Slabdeck resolves the challenge of having to use numerous apps to find items of interest. The Slabdeck mobile application is ...

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GreenBank Distribution Adjustment

Toronto, Ontario, July 14, 2017 – GreenBank Capital Inc (CSE: GBC and OTCMKTS: GRNBF) ("GreenBank or the Company") announces an adjustment to the ratio of shares comprising the distribution previously announced on July 5, 2017. As a result of the exercise of incentive stock options by directors previously announced on July 7, 2017, the number of issued and outstanding shares of the Company have increased. Accordingly, for every one GreenBank common share on the Record Date ...

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GreenBank Directors Exercise Options

Toronto, Ontario, July 7, 2017 – GreenBank Capital Inc (CSE: GBC and OTCMKTS: GRNBF) ("GreenBank or the Company") announces that effective July 6, 2017 a total of 300,000 incentive stock options were exercised by two directors of the Company for total proceeds of $56,000. There are now 24,665,793 common shares of the Company issued and outstanding. Separately, the Company announces that Ryan Hunter has resigned as a director of the Company with effect from July 6, 2017. The ...

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Jun
19

Even Micro-Cap Companies Not Immune To Proxy Battles

2013  Author:   

Financial Post article published Monday, June 17th, 2013
By: Barry Critchley

In one corner is Zara Resources, which is developing gold and nickel-copper projects in Ontario. In the other is the target, Visible Gold Mines, a company listed on the TSX Venture Exchange. Fotolia

It seems that size, or lack thereof, is not a factor when one investor wants to initiate an action against a public company.

In what is a rarity, two micro-cap companies, neither of which generate any revenue from operations, are waging a battle. But despite their lack of size, the language employed is reminiscent of that used by the big boys.

In one corner is Zara Resources, which has a market cap of about $4-million and whose shares are listed on the Canadian National Stock Exchange. Zara is developing gold and nickel-copper projects in Ontario.

In the other is the target, Visible Gold Mines, a company listed on the TSX Venture Exchange with a market cap of $1-million. Visible describes itself as “a significant land holder of the prolific Abitibi greenstone belt and a dynamic company aggressively searching for the next important gold deposit in northwestern Québec.”

The action started when Zara announced an offer to purchase 11.4 million shares of Visible, payable in Zara’s stock. (Zara has since upped the ante and requisitioned a special meeting designed to have its nominees elected to the board.)

The offer to acquire 11.4 million shares (19.9% of the shares outstanding) wasn’t chosen randomly. Indeed 19.9% comes with some advantages: it doesn’t amount to a formal takeover; it doesn’t trigger the so-called poison pill provisions and it is not the unpopular mini-tender where the offeror tries to acquire a stake at below market prices. Indeed Zara said that its offer represented a premium of 125% to the most recent price of Visible’s shares.

Why make Visible a target?

The usual reasons are at work:

  • Visible has under-performed. According to Zara, Visible’s share price is down by more than 90% from the average price of two private placements. “The current board has spent 96% of the $12.6-million raised from these private placements without any commercially viable gold deposit being identified.”
  • Its directors have a small share ownership – but collect large fees. According to Zara, the board has a 1.6% stake – but has received more than $750,000 in fees over the past three years.
  • The company’s cash position constrains its options. In its most recent MD&A, Visible said, “a significantly depressed share price provides the corporation with few alternatives other than to significantly reduce its exploration activities.” As well, Visible said it “does not foresee any equity financing in the near future.” Zara interpreted that statement in these terms: “Effectively the current board is out of ideas and is dead in the water.”

Visible argues Zara is trying to acquire a substantial position to give it substantial influence “without incurring the cost of purchasing all the shares.” It termed the “unsolicited partial offer” as highly opportunistic [and] coercive.

But Zara’s plan to acquire a 19.9% stake comes with a wrinkle: it is only open to tendering shareholders in Canada who meet the accredited investor rules, a move that limits the offer to certain shareholders. “When they accept the bid they are going to have to certify that they are accredited investors,” said Jim Boyle, of Boyle & Co., the law firm acting for Zara.

Boyle said a bid made to all shareholders would have required a full takeover bid circular “requiring a significant amount of additional documentation. Because the offer is made only to accredited investors it can be made by a simple offer,” with all the material detailed on three to four pages.

Shared via Even micro-cap companies not immune to proxy battles.

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