Crown Takes Steps To Discourage Potential Hostile Suitors
Denver-based Crown Resources Corp. has adopted measures to discourage potential hostile takeovers of the mining company, which owns half the Crown Jewel mine near Okanogan.
Crown’s board of directors Wednesday adopted new shareholder rights that give its common shareholders special rights in the event of a takeover.
Crown turned down a takeover bid from Battle Mountain Gold of Houston in April. Battle Mountain Gold owns the other half of the proposed Crown Jewel open-pit gold mine.
The new shareholder rights include each shareholder receiving a right to buy the common stock of any new company formed in a Crown takeover at half the cost of the stock’s market value.
For every share of common stock now owned, Crown shareholders receive the right to buy a share of the new common stock at half its value. The rights would only apply if an investor or group buys 15 percent or more of Crown’s common stock.
Also, all common stock sold by Crown from now on would carry with it the right to purchase 1/100th of a share of preferred stock for $25.
The option to buy the cheaper new common stock applies to all shareholders except any group or individual owning more than 15 percent. The company also retains the right to declare anyone who owns 10 percent or more of Crown’s stock as an “adverse person” whose subsequent stock rights would be invalid.
The new rights plan makes a hostile takeover more expensive for the person or group wanting to own Crown, which has stakes in other mining explorations domestically and internationally.
The new rules aren’t designed to prevent a friendly acquisition of Crown, officials said. Crown is not considering any offers currently, nor does it have a shareholder who owns more than 15 percent, said Crown President Christopher Herald.