8th Feb 2019 09:14
LONDON (Alliance News) - SolGold PLC has criticised Cornerstone Capital Resources for "so quickly" dismissed its plans to make an offer for the company.
Cornerstone is a Canadian firm which has a 15% interest in SolGold's Cascabel project in Ecuador, with SolGold having the rest.
On Thursday last week, SolGold said it would offer 0.55 of a SolGold share for each Cornerstone share, giving Cornerstone's shareholders an active participation in Cascabel, which contains the Alpala prospect.
This would represent 20% premium over Cornerstone's closing price before SolGold's announcement.
However, Cornerstone has rebuffed the incoming offer, with SolGold saying it is "surprised and disappointed" by the move. The rejection came "less than three hours" after SolGold's announcement of the planned offer, SolGold added.
SolGold has questioned whether that is enough time for Cornerstone to have consulted over 50% of shareholders, hold a board meeting, form a committee, or consult with financial advisors.
SolGold also said Cornerstone's share price rose after its announcement, which it believes shows the market thinks the offer is a good idea.
"SolGold believes all Cornerstone shareholders and warrant holders should be given the opportunity to make an informed decision with regard to the merits of the SolGold proposal, and that an independent review should be conducted by the Cornerstone board, properly advised by an independent committee thereof, before making public statements about the proposed offer," SolGold said.
"SolGold also recommends Cornerstone shareholders take time to analyse the rationale of a combination of Cornerstone and SolGold as outlined in SolGold's announcement."
SolGold still plans on proceeding with the planned offer, it added.
SolGold shares were trading flat on Friday at 35.44 pence each.
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