Iron Bridge Recommends Shareholders Reject Hostile Offer

Iron Bridge Resources (TSX:IBR), has announced its board of directors, unanimously recommends that company shareholders reject the unsolicited offer from Velvet Energy. The private company offered to acquire all of the issued and outstanding common shares of Iron Bridge Resources  at a price of C$0.75 per common share in cash.

Iron Bridge is a junior oil and gas company currently focused on one of the Montney oil plays in Western Canada.

As quoted from the press release:

As described in the letter to shareholders and directors’ circular filed today by the company, the Iron Bridge board carefully reviewed and considered the terms and conditions of the offer, with the assistance of its legal and financial advisors. On the basis of multiple factors, including an inadequacy opinion received from Cormark Securities Inc., its independent financial advisor, the board has unanimously concluded that the offer is not in the best interests of Iron Bridge shareholders.

The company has the support of its largest shareholders in rejecting the offer. IBR shareholders who together own approximately 36 percent of the outstanding common shares, including the company’s two largest institutional shareholders, have indicated that they will not tender their common shares in response to the Velvet offer.

“The board has determined that Velvet Energy’s predatory and conditional offer with its meagre premium substantially undervalues Iron Bridge and is not in the best interest of our shareholders. This cash take-over proposal would transfer all of the upside from
our premium Montney asset to Velvet Energy at the expense of Iron Bridge shareholders. With a world-class asset, a strong development plan, access to growth capital and a veteran management team, Iron Bridge is poised to deliver superior long-term shareholder returns and considerable value appreciation over the next 12 to 18 months, which is why we strongly recommend shareholders reject what is essentially a ‘smash and grab’ effort by Velvet Energy,” said Josh Young, non-executive Chairman of Iron Bridge.

Click here to read the full press release