Good thoughts and opinions.
The exemption 1 that I mentioned read:
1. Where the value of the consideration being offered is accepted and agreed to by certain other large arm's-length shareholders; [I see this as non-relevant]
An example of this would be as follows: let's pretend that a couple of other completely random companies, say Honda Canada and Canfor, each owned about 9% of KWG. They are both arms-length because neither owns >= 10%, and because neither has an insider on the BOD, and because KWG has not intentionally shared specific insider information with either company in the course of activities such as seeking professional advice on a corporate matter.
Let's say that CLF's offered 18 cents a share to both of those two random companies for their holdings. Both companies know that book value is probably north of 40 cents under the most conservative valuation model, yet despite that, both companies know that book value is rarely valuable as more than an opinion, and both decide that 18 cents per share is a reflection of current fair market value.
My interpretation is that the acceptance of an 18 cent offer as reasonable by such arms-length entities would be interpreted as demonstrative that 18 cents is a fair offer price for the market as a whole (demonstrated by the fact that the companies are willing to tender because a guarantee of 18 cents at present time is greater than the risk-adjusted NPV of a future offer at a potentially higher price).
The reason that I say that this is non-relevant is not that I dispute the logic of this type of scenario. In fact, if you've got large shareholders that are willing to bow out at a certain price, one could jump to the reasonable conclusion that it would be prudent to assume that a large investment entity is able to make more appropriate investment decisions than a solitary retail investor. However, I'm not currently aware of any such arms-length entities with enough skin in the game to even satisfy the requirements of this debatable exemption.
In layman's terms, since my language here is kind of convoluted, I think the logic of the exemption makes sense, but I don't think there's anyone who holds enough shares right now for this to be possible.
