We're in the midst of a game where one company is trying to put pressure on another company in a hostile takeover play, with a lot of disruption and innuendos thrown in for effect. It's part of the game and, as many other posters have said - this is just the beginning.
But, for a moment think about how this came to be: Mac Watson founded Freewest, built it, raised money for it, went public, drilled and drilled and found the motherlode of chromite! He also put a shareholders' rights plan in place, including a Poison Pill clause to protect his company.
It was a maneuver, a tactic, a deliberate move made to protect Freewest from exactly what is happening now. A hostile takeover bid. It slows down the process. Noront has said they will have to consider what action to take if Freewest fails to waive the Poison Pill. So - it looks like the Poison Pill has achieved its purpose.
But the one thing that hasn't been made clear is that - the $4,000,000 change of control payment to Mac Watson is only there in the event of a hostile takeover. It is a deterrent. It is a poison pill. It is not there in the case of a friendly takeover.
And it no doubt isn't a deal breaker for Noront given the huge scope of Freewest's assets, discoveries, jv's and Quest.
Noront also brings up the point of the payout being 27 times Mac's salary - so it appears that he is making $150,000 a year. Normal change of control payments are much less according to Noront - apparently they should be one to three times the salary of the executive. So it all depends on the remuneration of the individual concerned? Somehow I would be surprised if $150,000 is a huge salary these days for the senior executive in a company. Shall we compare with others? Well, that opens the door to a lot of speculation, doesn't it? But we won't walk through it, yet!
So let's have a level playing field here. Let's have a clean game. Let's compare apples with apples. The potential here for all of us, especially those who hold shares in both companies, is enormous. Whether this deal goes through or Cliffs decides to get into the game, or someone else for that matter - we are all winners and it's a very exciting game!
Irish
