The unsolicited takeover offer by Denison Mines (TSX:T.DML
, Stock Forum
) of Rockgate Capital (TSX:T.RGT
, Stock Forum
) appears to have hit a damaging and abrupt halt, as Denison has accused T.RGT management of improperly granting stock options to acquire 11 million common shares to directors and senior officers– almost 10%of Rockgate’s outstanding share total.
Denison is seeking British Columbia Securities Commission relief for ‘improper defensive tactics’.
Denison has also complained that Rockgate has granted new or enhanced change of control benefits to directors and management in the time since the takeover offer was submitted.
Rockgate had previously been the takeover target of Mega Uranium Ltd, (TSX:T.MGA
, Stock Forum
), but management rejected that offer
, paying a $1 million termination fee in the process, when the Denison deal came along.
According to a Denison news release
sent out Thursday morning, “The terms of Denison's offer include standard conditions designed to preserve Rockgate's business and capital structure as they stood prior to the announcement of Denison's offer on September 17, 2013. These include a condition that Rockgate not issue any additional options and that it not alter the employment arrangements between Rockgate and its officers, directors and employees. Denison's offer is conditional on at least 90% of Rockgate's shares being tendered to the bid, calculated on a fully-diluted basis.”
It continues, "Denison's offer is strongly supported by Rockgate's largest shareholders. Within the first week of announcing the offer, holders of more than 30% of Rockgate's shares committed to tender their shares to the Denison offer," stated Ron Hochstein, Denison's President and Chief Executive Officer.”
"These actions by Rockgate's management and directors are clearly intended to frustrate the Denison offer and to deprive Rockgate's shareholders of the opportunity to benefit from the transaction we have proposed. Rockgate's management has granted itself benefits while failing to make any recommendation to Rockgate's shareholders concerning our offer. We believe the grant of options was a tactical step intended to shift the decision-making power from Rockgate's shareholders to Rockgate's board and management and we are asking the British Columbia Securities Commission to intervene."
Rockgate rejected the allegations
, calling Denison a ‘hostile bidder’ and stated, “Contrary to the allegations by Denison, the actions by the Board of Directors of Rockgate, in granting the incentive stock options and entering into retention agreements with key technical employees in the face of Denison's unsolicited take-over bid offer for all the shares of Rockgate, were for a proper purpose and made in the best interest of the Company and not made in an effort to frustrate the Unsolicited Offer.”
Rockgate continues to go ‘takeover shopping, stating in their news release, “A number of parties have expressed interest in a potential transaction with Rockgate” and saying they require more time to consider options.
Denison, meanwhile, is advising Rockgate shareholders requiring assistance to contact Denison's Information Agent, Laurel Hill Advisory Group toll free at, 1-877-452-7184 (1-416-304-0211 collect outside North America) or by email at firstname.lastname@example.org
Rockgate stock has dropped from $0.215 in early October to $0.185 today as investors looking for takeover profits move away from the deal.
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