"I doubt if the challenge would work, as they do have the option of exercising a right to top up their holding with the purchase of shares from treasury. In other words, as HOOV says,they would get to infuse 20m into KWG to assist in KWG's efforts to squeeze them."

Yes K. But read the summarized clause (I would like to read the exact text of the Agreement, all we have is a summary from the MD&A) :

"2. Cliffs B.V. was granted pre-emptive rights with respect to the issuance (whether by private placement, public offering or otherwise) of securities of the Company, allowing it to purchase from the Company (on the same terms as applicable in the particular issuance) such number of securities as is necessary to ensure that Cliffs B.V.’s percentage ownership of securities (calculated on a fully diluted basis) immediately after such issuance would be nearly as nearly equal as possible to its percentage ownership immediately before such issuance."

I know that 'same terms' could mean 'at the equivalent price than the intrinsec value attached to the acquired property', but Cliffs could argue otherwise, and tell that a merger prevent them from exercising their preemptive right as intended (ie no cash consideration received from Spider, so why do they have to pay cash, would they have to transfer shres from their float in order to benefit of 'same terms'!!!). Still I don't think Cliffs intends to block the amalgamation process... I think they think it suitable since long ago...

GLTA.

BaBe.