TNR Gold Corp (TSX-V:TNR, OTC:TRRXF) said its board of directors has given the green light to a shareholder rights plan designed to safeguard against unsolicited or creeping takeover bids, although it emphasized that it was not a response to any specific acquisition proposal.
TNR Gold said the rights plan, drawn up in collaboration with Computershare Trust Company of Canada as the rights agent, aligns with similar plans implemented by other Canadian issuers, seeks to provide the board with ample time to evaluate any potential takeover bid or acquisition and, if deemed appropriate, explore alternative strategies that could enhance shareholder value.
Under the terms of the rights plan, each common share in the company will be issued one right, and any future share issuance will also be accompanied by a right. Importantly, the rights will automatically attach to the shares without any additional action required from shareholders, ensuring smooth trading.
The rights issued under the plan will become exercisable only if a person, along with related parties, acquires or announces their intention to acquire 20% or more beneficial ownership of outstanding shares without complying with the 'Permitted Bid' provisions. If such a situation arises, the rights will entitle holders - excluding the acquiring person and related parties - to purchase shares at a significant discount to the market price at that time.
To qualify as a 'Permitted Bid', the take-over bid must satisfy certain conditions, including a minimum 105-day period during which no shares will be taken up or paid for, unless at least 50% of outstanding shares held by non-offeror shareholders have been deposited and not withdrawn. The offeror must also allow an additional ten business days for non-tendering shareholders to participate in the bid.
Implementation of the rights plan is contingent upon approval from the TSX Venture Exchange and is effective immediately. However, it must also receive shareholder ratification within six months of adoption; otherwise, it will terminate.
TNR Gold said it believes that the adoption of the shareholder rights plan will enhance transparency, protect shareholder interests, and ensure that any change in control of the company is carried out in a fair and measured manner.
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