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The Merger and Acquisition Process

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In this presentation, FMC's Brian Abraham ,Q.C., takes an look at the merger and acquisition process in Canada. It covers topics such as: confidentiality agreements, special committees, securitie issues, due diligence, take-overs vs. plans of arrangement, m&a trends, as well as examples of recend deals in British Columbia.

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The Merger and Acquisition Process

  1. 1. The Merger and Acquisition ProcessPresented by:Brian Abraham, Q.C. P.Geo 1
  2. 2. Confidentiality Agreements (Friendly Deals)• Unique‐not generic• What is covered?• Standstills, lockups• Opt outs (spring mechanism) 2
  3. 3. Special Committees• Not management• Independent directors• Recommendation only• Advisors, financial, legal, technical 3
  4. 4. Securities Issues• Undisclosed material facts• Technical reports• Fairness opinion• Poison pills 4
  5. 5. Due Diligence• Data• Publicly available information• Cooperation  5
  6. 6. Takeover vs. Plan of Arrangement• Takeover – 20% threshold – Hostile – Relatively fast – 90% percentage – Squeeze‐out provisions – US shareholders – Insider bids and disclosure – Information circular – Targets response 6
  7. 7. Takeover vs. Plan of Arrangement (cont’d)• Plan of Arrangement – Friendly – 2/3 of those shareholders at a meeting – Court order – US shareholders exemption – Greater flexibility – Spincos 7
  8. 8. M&A Trends• Bigger – Why, deposits, harder to find, riskier countries, size criteria – Multiple elements• Why do them? – Cheap acquisition – Expertise acquisition – Strategic – Actual deposits – Closeology – Demand – Weakness of target – Control metals – Securing for future supply – Neighbours – Infrastructure 8
  9. 9. M&A Trends (cont’d)• Fallout – Management – Spin outs – Lost properties – Knowledge and data 9
  10. 10. Metal Prices• Copper• Gold• Uranium• Silver• Nickel 10
  11. 11. Recent Examples in BC• Hathor‐Cameco and Rio Tinto• NovaGold and Copper Canyon• Imperial‐American Bullion• New Gold and surrounding areas 11
  12. 12. Thank you! Brian E. Abraham, Q.C.brain.abraham@fmc-law.com 1-604-443-7134 LinkedIn
  13. 13. The preceding presentation contains examples of the kinds of issues companies dealing with mergers and acquisitions could face. If you are faced with one of these issues, please retain  professional assistance as each situation is unique.

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