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Did Liberty get special treatment. They own some common shares as well? Our Shareholder Right's Plan dicates equal treatment. I bet a judge would sway to our side.
For now, please put me down for 85 000 NO votes.
On December 6, 2011, the shareholders approved a Shareholder Rights Plan for the Company. The Shareholder Rights Plan is designed to provide shareholders and the Board of Directors with adequate time to consider and evaluate any unsolicited take-over bid made for the Company’s common shares, provide the Board of Directors with adequate time to identify, develop and negotiate value-enhancing alternatives, encourage the fair and equal treatment of shareholders in connection with any take-over bid for the Company’s common shares and generally to prevent any person from acquiring ownership of or the right to vote more than 20% of the Company’s common shares while the process undertaken by the Board of Directors is ongoing.
Pursuant to the Shareholder Rights Plan, rights were issued and attached to all outstanding common shares. Each right issued is exercisable at $100. Rights are only exercisable under certain circumstances
When you think about it from a lenders perspective, why would any financial institution lend Allana money when it's own partner hasn't fully invested (warrants = $84 million overall).
ICL played thier cards right. Wait it out, then lowball Allana with a takeover instead.
Well we can now say Allana's project is fully validated. Now if only this crappy deal could be blocked and replaced with a better one???
The Second Tranche Offering is part of the Company's strategic alliance with ICL pursuant to which an ICL subsidiary entered into a Share Purchase Agreement with Allana on February 12, 2014 for an aggregate investment of $25 million in Units of the Company at a price of $0.47 per Unit on a private placement basis (the "Offering") with the potential for a total investment of up to $84 million upon full exercise of the Warrants comprising part of the Units. The Company closed on the initial $10.6 million investment on February 12, 2014
How can a company with a 2.9 billion NPV sell for only 137 million? Of that 137 million, at least 100 million of shareholder money was used to get us towards the final stage. This is not a good business deal for us.
Why even sell now. The potash market sucks right now. The juniors are mostly in a holding pattern.
The total value of the SOP operation in the most recent economic study was $1.6B and the MOP production had a net present value of $1.3B for a combined NPV of $2.9B.
Copied from the Allana website.
It mentions " equal treatment of shareholders ". How is it that Liberty got a different deal. I wasn't notified of anything until after the fact.
On December 6, 2011, the shareholders approved a Shareholder Rights Plan for the Company. The Shareholder Rights Plan is designed to provide shareholders and the Board of Directors with adequate time to consider and evaluate any unsolicited take-over bid made for the Company’s common shares, provide the Board of Directors with adequate time to identify, develop and negotiate value-enhancing alternatives, encourage the fair and equal treatment of shareholders in connection with any take-over bid for the Company’s common shares and generally to prevent any person from acquiring ownership of or the right to vote more than 20% of the Company’s common shares while the process undertaken by the Board of Directors is ongoing.
Pursuant to the Shareholder Rights Plan, rights were issued and attached to all outstanding common shares. Each right issued is exercisable at $100. Rights are only exercisable under certain circumstances.
So it looks like that meeting for a possible partnership with Yara is not going to happen. So much potential for Allana and we get sold out for a quick buck, make that 50 cents #$@*%
Markets | Fri Mar 27, 2015 10:10am EDT
UPDATE 1-Israel Chemicals makes $109 mln offer for Allana Potash
(Adds share activity, analyst's comment, context)
By Ari Rabinovitch and Rod Nickel
JERUSALEM/WINNIPEG, March 27 (Reuters) - Potash producer Israel Chemicals said on Friday it had made a C$137 million ($109.50 million) offer to buy Canada's Allana Potash, a deal it hopes will accelerate development of a mine in Ethiopia.
Israel Chemicals (ICL) already owns 16.36 percent of shares in Allana, whose Danakhil project in northeast Ethiopia could yield up to 1 million tonnes of muriate of potash per year for 25 years. It will pay 50 Canadian cents per share for the remaining shares.
The offer is a 51.5 percent premium to Allana's closing price on Thursday, prior to the offer being announced.
On Friday, Allana shares jumped 45 percent to 48 Canadian cents in morning trading in Toronto. ICL shares edged slightly higher in New York.
A takeover by ICL, the world's sixth-biggest potash producer, would push the mine closer to construction and give ICL a future low-cost source of the fertilizer. The mine is small compared to those operated by top producers Uralkali and Potash Corp of Saskatchewan, but would add to a global capacity glut.
"Acquiring ownership of Allana will enable ICL to control the development of the Danakhil project, accelerate pre-construction engineering design work, as well as secure project financing," ICL said in a statement.
The acquisition, to be paid for in cash and shares in ICL's common stock, is supported by Allana's board of directors, but is still subject to conditions and regulations, ICL said.
Along with muriate of potash (MOP), the commodity form of the crop nutrient, Allana is studying potential for producing the premium product sulfate of potash (SOP) at the site. Norwegian fertilizer giant Yara International is developing an adjacent SOP project, and Allana Chief Executive Farhad Abasov said this month that he planned to talk with Yara about a partnership
Yara spokesman Bernhard Mauritz Stormyr declined comment on ICL's offer to Allana. Allana said it has granted ICL a right to match any competing offer.
It's unlikely that another bid will emerge, and the offer is likely the best option for Allana given challenging conditions for junior potash companies, Raymond James analyst Steve Hansen said in a note.
The deal must close by Aug. 17.
ICL is the second-largest Israeli company on the Tel Aviv Stock Exchange and one of the three largest suppliers of the crop nutrient potash to China, India and Europe.
($1 = 1.2511 Canadian dollars) (Editing by Pravin Char amd W Simon)
Mentioned in article, for what it's worth. I wish I was informed of this before.
Allana Potash Corp agrees to $137-million takeover bid from Israel Chemicals
Allana PotashAcquiring Allana Potash Corp gives Israel Chemicals (ICL) the Danakil potash project in Ethiopia.
Allana Potash Corp. agreed to a $137-million takeover bid from Israel Chemicals Ltd. because its chief executive said there was no other way to avoid massive dilution of shareholders.
Toronto-based Allana is in the same position as many other junior mining firms: it has a great project but no easy way to finance it in the current rough market conditions. The company’s Danakil project in Ethiopia is expected to cost US$642 million; by comparison, Allana had less than $8 million on its balance sheet at the end of January.
“Even if we could raise half of the money through debt, which is uncertain, we would still have to raise substantial amounts through equity,” Allana CEO Farhad Abasov said in an interview. “And that equity would come at a substantial discount to the current price.”
Allana did have options apart from an outright takeover. According to a source, the company was in negotiations to sell a large stake in itself to a state-owned Chinese construction firm that could finance the project. The source said the premium was very significant. But Mr. Abasov argued the Chinese option would be punitive for shareholders.
“It would be close to 100%, if not more, dilution for shareholders,” he said.
Related
- Jack M. Mintz: Brad Wall’s good potash play
- Potash Corp profit to take $100-million hit this year after Saskatchewan tax-rule changes
<a href="http://ad.ca.doubleclick.net/N3081/jump/fpo_news/news/mining/story/;loc=mid;sz=300x250;tile=7;blog=mining;nk=print;pr=fp;ck=news;sck=mining;aid=536662102;author=Peter-Koven;tag=breaking;tag=potash;page=story;!c=iframe;ord=364679?" target="_blank"> <img src="http://ad.ca.doubleclick.net/N3081/ad/fpo_news/news/mining/story/;loc=mid;sz=300x250;tile=7;blog=mining;nk=print;pr=fp;ck=news;sck=mining;aid=536662102;author=Peter-Koven;tag=breaking;tag=potash;page=story;!c=iframe;ord=364679?" /> </a>
The all-cash bid from fertilizer heavyweight Israel Chemicals (ICL) is worth 50¢ a share. That is a healthy 51.5% premium to Allana’s closing price on Thursday, but is far below the high of $2.30 in 2011.
Regardless, analysts said accepting the offer made sense.
“We’re inclined to believe this deal represents the best practical outcome for investors given the challenged market environment for junior potash companies,” Raymond James analyst Steve Hansen said in a note. “In short, we don’t view going it alone as a viable option.”
The deal has implications for the broader potash sector as well. With ICL in control of Danakil, there is a greater likelihood the project will reach production in the near future. AltaCorp Capital analyst John Chu said that could raise concerns about more potash production capacity hitting a market that already has plenty of excess capacity.
On the other hand, he pointed out that this deal is good news for all the struggling junior potash firms. “It may breathe a little bit of hope [into them], seeing some M&A activity that may spur additional transactions down the road, despite what is already an over-supplied market,” he said in a note.
ICL had a leg up on any other potential acquirer because it owns 16.4% of Allana’s shares. The Danakil project helps ICL diversify its asset base outside Israel, and gives the company a project that is close to key African and Asian markets. Danakil is expected to produce up to one million tonnes of potash a year for 25 years, and construction costs are far lower than major potash projects in Saskatchewan.
Canadian fertilizer giant Potash Corp. of Saskatchewan Inc. tried to buy ICL two years ago, but abandoned that plan after it ran into political opposition in Israel.
Allana is part of Forbes & Manhattan Inc., a resource conglomerate based in Toronto.