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Message: MAG Silver Provides Update on Fresnillo "Take-Under" Bid
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they're going to try to wake up the osc. this could be tricky.
May 8, 2009 |
| MAG Silver Provides Update on Fresnillo "Take-Under" Bid |
| VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 8, 2009) - MAG Silver Corp. (TSX:MAG)(NYSE Amex:MVG) ("MAG"), announced today that it has delivered a formal application for a hearing before the Ontario Securities Commission to compel Fresnillo to produce the critical information that relates to Fresnillo's publicly disclosed plans to develop the Juanicipio joint venture property, owned jointly by MAG (44%) and Fresnillo (56%), as part of its Fresnillo II regional mine development plan. The failure of Fresnillo to provide this information resulted in the February 1, 2009 suspension by MAG's Independent Committee of the valuation that was being prepared in connection with a takeover bid for MAG proposed by insider Fresbal Investments, Ltd. (a wholly-owned subsidiary of Fresnillo plc). Following the valuation suspension, both MAG and Fresnillo have had extensive discussions regarding the valuation with staff of the Ontario Securities Commission. Following those discussions, Fresnillo was requested to provide important additional information to MAG's Independent Committee and the Independent Valuator to allow the valuation process to recommence. Although following those discussions it has been agreed that additional information must be provided by Fresnillo, substantial disagreement continues between the companies regarding the nature of the information to be provided. In MAG's view, it is plainly obvious that if Fresnillo succeeds in acquiring control of MAG, Fresnillo will rapidly move to develop the Juanicipio property as part of Fresnillo's long standing Fresnillo II regional mine development program described in Fresnillo's IPO prospectus disseminated in May 2008, as well as in numerous other documents and website materials filed or made available by Fresnillo since that date. Fresnillo continues to refuse to provide MAG's Independent Committee and the Independent Valuator with critical documents tied to that regional mine development plan. Instead, Fresnillo has taken the position that critical documents relating to its regional mine development program do not exist and has signaled to MAG that Fresnillo intends to provide only a narrow set of documents that reflect what the Juanicipio property would look like if it were developed on an isolated, stand-alone basis. In MAG's view, Fresnillo's position that regional development program documents do not exist is not supportable, and providing documents for a hypothetical stand-alone project that would not be built if Fresnillo acquired MAG is a transparent attempt to hide from the Independent Committee, the Independent Valuator and MAG's minority shareholders critical information that will demonstrate the true value of MAG's world class silver assets. In light of the inability of MAG and Fresnillo to resolve this critical issue, MAG is now asking the Ontario Securities Commission to issue an order compelling Fresnillo to provide the requested information. MAG believes that this information is critical in order to allow the Independent Valuator to complete a reliable valuation in accordance with applicable regulatory requirements. Such a valuation will allow MAG shareholders to make an informed decision about whether to tender to a Fresnillo offer and, importantly, to ensure that Fresnillo, an insider of MAG, cannot use its informational advantage opportunistically to acquire MAG (and its interest in the Juanicipio joint venture) at a price that does not reflect fair value and that ignores or hides the distinctive material benefits that will accrue to Fresnillo if it succeeds in acquiring MAG. MAG has also asked the Ontario Securities Commission to enjoin Fresnillo from proceeding with its announced "take-under" bid if Fresnillo refuses to comply with any document production order so as to finally put an end to this take-over bid threat that has persisted for over five months. MAG also announced today that it has filed a formal request for arbitration with the International Court of Arbitration of the International Chamber of Commerce. MAG is seeking urgent relief on the grounds that Fresnillo is attempting to acquire control of MAG on a hostile basis in breach of the standstill provisions contained in the shareholders agreement governing the Juanicipio joint venture. MAG is also seeking relief in relation to other alleged violations by Fresnillo as operator under the shareholders agreement. MAG's Board and senior officers are taking these actions to ensure that Fresnillo is required to comply with the applicable minority protections under Canadian securities laws and under the Juanicipio shareholders agreement. MAG's Board reiterates that its actions are directed at one and only one objective - to compel Fresnillo to pay fair value to the minority shareholders of MAG if Fresnillo chooses to proceed with an offer to acquire control of the company. MAG's CEO, Dan MacInnis, commented: "We are extremely troubled that Fresnillo has made no attempt to comply with its legal and contractual obligations to MAG and its minority shareholders. Those requirements exist for one reason - to ensure fair and equitable treatment in a change of control transaction. As managers and as shareholders, we are completely fed up. If Fresnillo wants control of MAG and its world class silver assets, and is prepared to pay fair value, fine. We have no problems with that. But if Fresnillo persists in its attempt to steal value from our minority shareholders, we will oppose them in every way legally possible." Said Mr. MacInnis: "This proposed "take-under" bid has dragged on far too long. It has been damaging to all of our stakeholders including our minority shareholders. It is time for Fresnillo to comply with its obligations, and we are taking appropriate actions to achieve that result." MAG reaffirms that MAG shareholders do not need to take any action to respond to the December 1, 2008 Fresbal announcement. |
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