Crocodile Gold Corp. Implements Shareholder Rights Plan to Mitigate Takeover Bid

Strategic Insights -

Crocodile Gold Corp. announced the adoption of a limited duration Shareholder Rights Plan in response to an unsolicited takeover proposal from Luxor Capital Group, LP. The plan aims to protect shareholder interests and provides a framework for evaluating potential acquisition bids. The Rights Plan is set to expire on February 29, 2012, and authorizes the issuance of one right for each common share of the company. If a person acquires or announces an intention to acquire 20% or more of the outstanding common shares, the rights will become exercisable, allowing holders to purchase common shares at a discounted price.

Key Takeaways:

  • Crocodile Gold Corp. has implemented a Shareholder Rights Plan to protect against a potential takeover bid by Luxor Capital Group, LP.
  • The plan is designed to provide a fair treatment of shareholders and allow them sufficient time to evaluate potential acquisition bids without undue pressure.
  • The Rights Plan authorizes the issuance of one right for each common share of the company, which will become exercisable if a person acquires or announces an intention to acquire 20% or more of the outstanding common shares.
  • The plan permits the acquisition of control of Crocodile Gold through various methods, including a permitted bid, competing permitted bid, or negotiated transaction.
  • The Board has discretion to defer the time at which the rights become exercisable and to waive the application of the Rights Plan if determined to be in the best interests of the company.

Statistics:

  • 20% threshold for acquisition of common shares that triggers the Rights Plan
  • 60-day minimum period for a permitted bid
  • 50% minimum tender condition for a permitted bid
  • 3,300 square kilometers of land position in the Northern Territory of Australia
  • 3.175 million ounces of National Instrument 43-101 compliant measured and indicated mineral resources
  • 2.14 million ounces of inferred mineral resources
  • 2.4 million tonne per year Union Reefs Mill production capacity

Sources:

  • Crocodile Gold Corp. (MARKETWIRE via COMTEX) - Toronto, ONTARIO, Dec 19, 2011 - Copyright 2011 Marketwire, Inc., All rights reserved.