2727957 Ontario Inc. entered into a non-binding offer letter to acquire Continental Gold Inc. from a group of shareholders for CAD 1.1 billion.
Newmont Goldcorp Corporation and Directors and officers of Continental collectively holding approximately 21.5% of the outstanding Continental common shares have entered into voting support agreements to support the transaction. The agreement includes, among other things, a non-solicitation covenant on the part of Continental (subject to customary fiduciary out provisions) and a right for Zijin to match any competing offer that constitutes a superior proposal. The transaction is not subject to a financing condition. The transaction will be subject to the approval of at least 66-2/3% of the votes cast by shareholders and more than 50% of the votes cast by disinterested shareholders at a special meeting of Continental shareholders expected to be held in January 2020. In addition to shareholder approval, the transaction is also subject to the receipt of certain regulatory approvals including the ICA approval, the PRC approvals and other regulatory approvals, court and stock exchange approvals and other closing conditions. Transaction is also subject to the dissent rights shall not have been validly exercised (and not withdrawn) with respect to more than 10% of the issued and outstanding Common Shares. The transaction has been unanimously approved by the Board of Directors of Continental based in part on the unanimous recommendation of a special committee of independent Directors of Continental, the fairness opinion that the Board received from Maxit Capital and the fairness opinion that the Special Committee received from Cormark Securities. The proposal in relation to the acquisition was considered and approved at the Zijin Mining's Board's extraordinary meeting on 2 December 2019. As of December 3, 2019, a special meeting of the shareholders of Continental Gold will be held on January 28, 2020. As of January 28, 2020, the transaction has been approved by the shareholders of Continental Gold. As of January 30, 2020 Continental Gold has received a final order from the Ontario Superior Court of Justice approving the deal. As of February 27, 2020, Zijin received the Canadian Investment Canada Act approval, as well as all three of the required regulatory approvals from the People's Republic of China. The transaction is to be completed within 4 months after signing of the agreement. If the relevant governmental approvals have not been obtained within 4 months, the time of closing may be extended by a period of 1-2 months. As of December 31, 2019, the transaction is expected to close in first quarter of 2020. As of February 27, 2020, the transaction is expected to be completed within 10 business days, subject to satisfying certain other closing conditions.
Maxit Capital LP has provided an opinion to the Continental Board of Directors and Cormark Securities Inc. has provided an opinion to the special committee, respectively, stating that, based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration offered to the Continental shareholders pursuant to the transaction is fair, from a financial point of view, to the Continental shareholders. Credit Suisse acted as financial advisor to Zijin and Joyce Lee, Daniel Bornstein, Jason Gudofsky, Pavan Jawanda and Christopher Langdon, of McCarthy Tétrault LLP acted as legal advisors to 2727957 Ontario Inc. Maxit Capital LP acted as financial advisor to Continental. Jay Goldman, lindsay Clements, Paul M. Stein, Jeffrey P. Roy, Ali Naushahi, Jennifer Wasylyk, Christopher B. Norton, Chris Hersh of Cassels Brock & Blackwell LLP acted as legal advisors to Continental and John Turner and Brad Freelan of Fasken Martineau DuMoulin LLP acted as legal counsels to the special committee of Continental Gold. Cormark Securities Inc. acted as financial advisor to the special committee of Continental Gold. Chungs Lawyers acted as legal advisor to Zijin Mining Group in the transaction. Laurel Hill Advisory Group, LLC acted as information agent for Continental Gold Inc.