Pre-emption rights? Eh? Mandatory bid? Come off it. READ THE STATEMENT:
Although Highland Gold has its registered office in Jersey, the Panel has previously confirmed that Highland Gold is not subject to the Takeover Code and shareholders will not be afforded any protections under the Takeover Code. It is not expected that this position will change as a result of this transaction.
As Highland Gold is not currently a company subject to the Takeover Code, investors should be aware that shareholders (including Barrick, and, in due course, Millhouse LLC) are able to increase their interests in voting rights in Highland Gold to any level without having to make a mandatory offer under the Takeover Code.
Since stumbling onto London’s reg-lite AIM market in 2002, Russian metals prospect Highland Gold has managed to break every corporate etiquette in the listed company book.
Partners have come and (substantially) gone – the Fleming family, Harmony Gold of South Africa, and the mighty Barrick Gold. All got bogged down Highland’s internecine affairs and seemingly gave up.
Now it’s the turn of Roman Abramovich, the Russian proprietor of London’s Chelsea Football Club. He and a group of unnamed partners control Millhouse, which is simply described as an asset management company. Millhouse is ready to pump just under £200m into Highland – first through a subscription for 65m shares at 151p apiece that will take its stake to 25 per cent, and then through another subscription for the same amount of shares at the same price, which will take its holding to 40 per cent – once shareholders have given the nod.
Friends of Highland, pointing to the difficult time the company has had and noting the inhospitable environment in which it operates, say the cash is much needed.
But the truly relevant fact here seems to concern the Mayskoye gold project. There were all sorts of rumours in the summer that Highland was going to lose its local license and Oleg Mitvol, the Kremlin’s environmental attack dog, warned as much in October before Highland was granted a three year extension for the planned mine.
But Mayskoye is based in Chukotka, in the far north east of Russia. That’s where Mr Abramovich is regional governor. Highland bought the Mayskoye licence in 2003 from Deerfield Universale, a Russian firm.
Through the years there has been repeated chatter of historical links between Highland and the Chelsea boss. No matter, since Mr Abramovich is now making the relationship formal – buying effective control of Highland, and at a 20 per cent discount to the original AIM flotation price.
So maybe this partnership will stick.