- Special meeting of shareholders to approve the Arrangement
to be held on September 12,
2019
- Shareholders are encouraged to vote well in advance of the
voting deadline of September 10, 2019
at 10:00 a.m. (Toronto time)
- Cobalt 27 Board and Special Committee unanimously recommend
that shareholders vote in favour of the Arrangement
- ISS has recommended that shareholders vote in favour of the
Arrangement
- Recent third party acquisition proposal withdrawn
- Update on Nickel 28
TORONTO, Sept. 3, 2019 /CNW/ - Cobalt 27 Capital Corp.
(TSXV: KBLT) (OTCQX: CBLLF) (FRA: 270) ("Cobalt 27" or the
"Company") today provides an update in connection with the proposed
acquisition of Cobalt 27 by Pala Investments Limited ("Pala") by
way of a plan of arrangement (the "Arrangement"), pursuant to which
Pala will indirectly acquire all of the issued and outstanding
shares of the Company, other than the approximately 19% that Pala
already owns, by way of statutory plan of arrangement. Under the
Arrangement, shareholders of Cobalt 27 will receive consideration
of C$5.75 per common share, comprised
of C$3.57 in cash plus shares of a
newly listed company named Nickel 28 Capital Corp. ("Nickel 28")
with an implied value of C$2.18 per
share.
Shareholders Meeting to Approve the Arrangement
Cobalt 27 shareholders will be asked to approve the Arrangement
at the annual general and special meeting of shareholders to be
held on September 12, 2019, at
10:00 a.m. (Toronto time) at the offices of Stikeman
Elliott LLP, 5300 Commerce Court West, 199 Bay Street, Toronto, Ontario. Only Cobalt 27 shareholders
of record at the close of business on August 12,
2019 will be entitled to receive notice of and vote at the
meeting, or any adjournment or postponement thereof.
The Cobalt 27 Special Committee and Board of Directors
reiterate their UNANIMOUS recommendation that you vote FOR the
Arrangement. Your vote is IMPORTANT to the success of this
transaction.
On August 27, 2019 Institutional
Shareholder Services Inc. ("ISS"), a leading independent proxy
advisory firm, recommended that the Company's shareholders vote FOR
the Arrangement.
Cobalt 27 shareholders are encouraged to review in detail the
Management Information Circular dated August
13, 2019 (the "Circular"), which provides details of the
Arrangement. An electronic copy of the Circular is available on the
Company's website at https://www.cobalt27.com/investors/financials/
and on SEDAR under Cobalt 27's profile at www.sedar.com.
Cobalt 27 shareholders are encouraged to vote well in advance of
the voting deadline of September 10,
2019 at 10:00 a.m.
(Toronto time).
Cobalt 27 shareholders who have questions about the Circular, or
need assistance with voting their shares, can contact our proxy
solicitation agent, Kingsdale Advisors:
Kingsdale Advisors North American Toll-Free Number:
+1.888.518.6554
Outside North America, Banks,
Brokers and Collect Calls: +1.416.867.2272
Email: contactus@kingsdaleadvisors.com
North American Toll-Free Facsimile: +1.888.683.6007
Facsimile: +1.416.867.2271
Shareholders are encouraged to vote today using the internet,
telephone or facsimile. Your vote is important regardless of the
number of Cobalt 27 shares you own.
Withdrawn Third Party Acquisition Proposal
On August 12, 2019, Cobalt 27
received an unsolicited, confidential, non-binding offer from a
private streaming and royalty company (the "Potential Offeror"),
pursuant to which the Potential Offeror had offered to acquire all
of the issued and outstanding common shares of the Company by way
of plan of arrangement for consideration per share comprised of
C$4.00 in cash plus one share of
Nickel 28 (collectively, the "Acquisition Proposal"). The
Acquisition Proposal was expressly subject to, among other things,
completion of confirmatory due diligence, approval of the board of
directors of the Potential Offeror, and negotiation of a definitive
arrangement agreement with Cobalt 27.
On August 13, 2019, the board of
directors of Cobalt 27 (the "Cobalt 27 Board") and the independent
special committee of the Cobalt 27 Board each met and determined,
after consultation with their outside financial and legal advisors,
that the Acquisition Proposal could reasonably be expected to lead
to a Superior Proposal (as this term is defined in the arrangement
agreement dated June 17, 2019 between
Cobalt 27 and Pala). Subsequently, Cobalt 27 and the Potential
Offeror entered into a confidentiality and standstill agreement,
following which the Potential Offeror was provided with full access
to Cobalt 27's dataroom (including the same information as provided
to Pala) as well as the Company's professional advisors for
purposes of evaluating and negotiating the terms of a potential
alternative transaction.
After the close of trading on August 30,
2019, and after the Potential Offeror had been provided
diligence information with respect to Cobalt 27, the Potential
Offeror advised Cobalt 27 that its previous non-binding proposal
had expired and that it would not be submitting any further
proposal to Cobalt 27. The Potential Offeror attributed its
decision to refrain from proceeding with a transaction to its own
assessment of the risks of a transaction given recent events in
Papua New Guinea (see "Update
Regarding Nickel 28" below) and the unresolved business issues that
the parties had been discussing in relation to a definitive
agreement, which issues related to which party would bear the
regulatory risks of a transaction (as compared to the terms and
conditions of the Arrangement), and the means by which the
Potential Offeror would have had to fund the termination fee that
would have been payable to Pala in the event that the Potential
Offeror had ultimately made a Superior Proposal. The Cobalt 27
Board has not made any change in its recommendation regarding the
Arrangement and continues to unanimously recommend that
shareholders vote in favour of the Arrangement with Pala.
Update Regarding Nickel 28
The Board of Cobalt 27 continues to believe that Nickel 28
should provide shareholders with attractive exposure to battery
metal upside and the electric vehicle revolution. Since the
Arrangement with Pala was announced on June 18, 2019 to
August 30, 2019, the price of nickel
has increased 51% from US$5.40 per lb
to US$8.17 per lb. The outlook for
nickel is also anticipated to be positively impacted by
Indonesia's expected ban on
exports of nickel ore to come into effect by year
end.
Cobalt 27 also notes reports of an accidental waste discharge on
August 24, 2019 at the Ramu nickel
Basamak plant in Papua New Guinea
which is operated by Metallurgical Corp. of China ("MCC"). Cobalt 27's subsidiary
Highlands Pacific Limited holds an 8.56% joint venture interest in
the Ramu mining and processing operations. Cobalt 27
understands that the discharge has been contained, has had a
limited impact and that MCC is working with local authorities on
appropriate remedial measures.
About Cobalt 27
Cobalt 27 Capital Corp. is a leading battery metals streaming
company offering exposure to metals integral to key technologies of
the electric vehicle and energy storage markets. Cobalt 27 holds an
8.56% joint venture interest in the long-life, world-class Ramu
operation which currently delivers near-term attributable nickel
and cobalt production. Cobalt 27 also manages a portfolio of 11
royalties. Cobalt 27 also owns physical cobalt and a cobalt stream
on the Voisey's Bay mine.
Cautionary Note Regarding Forward-Looking Statements
This news release contains certain information which constitutes
'forward-looking statements' and 'forward-looking information'
within the meaning of applicable Canadian securities laws. Any
statements that are contained in this news release that are not
statements of historical fact may be deemed to be forward-looking
statements. Forward looking statements are often identified by
terms such as "may", "should", "anticipate", "expect", "potential",
"believe", "intend" or the negative of these terms and similar
expressions. Forward-looking statements in this news release
include, but are not limited to statements with respect to: future
prices of and market demand for nickel, the business and assets
(including their implied value) of Nickel 28 and its strategy going
forward; risks relating to the accidental waste discharge at the
Ramu nickel Basamak plant which remain unpredictable and subject to
clarification; the consideration to be received by shareholders of
Cobalt 27, which may fluctuate in value due to Nickel 28 common
shares forming part of the consideration; and the satisfaction of
closing conditions to the Arrangement including, without limitation
(i) required Cobalt 27 shareholder approvals; (ii) necessary court
approval in connection with the plan of arrangement; (iii) no
exercise of the termination rights available to the parties in
respect of the Arrangement; (iv) Cobalt 27 obtaining the necessary
approvals from the TSX Venture Exchange for the listing of the
common shares of Nickel 28 in connection with the Arrangement; and
(v) other closing conditions, including, without limitation, other
regulatory approvals and compliance by Cobalt 27 and Pala with
various covenants and representations contained in the arrangement
agreement for the Arrangement. In particular, there can be no
assurance that the Arrangement will be completed. Readers are
cautioned not to place undue reliance on forward-looking
statements. Forward-looking statements involve known and unknown
risks and uncertainties, most of which are beyond the Company's
control. For more details on these and other risk factors see the
Company's management information circular dated August 13, 2019 on file with Canadian securities
regulatory authorities on SEDAR at www.sedar.com under the heading
"Risk Factors". Should one or more of the risks or uncertainties
underlying these forward-looking statements materialize, or should
assumptions underlying the forward-looking statements prove
incorrect, actual results, performance or achievements could vary
materially from those expressed or implied by the forward-looking
statements.
The forward-looking statements contained herein are made as of
the date of this release and, other than as required by applicable
securities laws, the Company does not assume any obligation to
update or revise them to reflect new events or circumstances. The
forward-looking statements contained in this release are expressly
qualified by this cautionary statement.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release. No securities regulatory authority has
either approved or disapproved of the contents of this news
release.