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BCSC Permits Private Placement in Face of a Hostile Bid

December-1-2015

Area Corporate Finance and Securities, Mergers and Acquisitions

Summary

The British Columbia Securities Commission (BCSC) has released its reasons in an application brought by Red Eagle Mining Corporation (“Red Eagle”) alleging improper defensive tactics by CB Gold Inc. (“CB Gold”).  Red Eagle had applied to the BCSC to cease trade both CB Gold’s shareholder rights plan and a private placement to Batero Gold Corp. (“Batero”), which had also entered into a support agreement with CB Gold in connection with an offer by Batero for all of CB Gold’s shares (the “Batero Agreement”).  The BCSC cease traded the rights plan. However, it allowed the private placement, highlighting the difficulties bidders face in overcoming certain defensive tactics by application to the securities regulator.

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