As Support Grows for Raging River Capital LP, Taseko Mines Limited Shows Disturbing Signs of Desperation
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb. 29, 2016) -
Editors Note: There are three images associated with this press release.
-Raging River's campaign for change is proving effective even before its nominees are on the Taseko Board. However, the support agreement with SailingStone Capital Partners LLC to nominate two directors is a facade to cover the reality that entrenched, self-interested Hunter Dickinson related directors are not actually being replaced and will continue to have significant and, we believe, conflicted influence
- Increasingly erratic actions of self-preservation suggest the Taseko Board is moving toward a campaign of frivolous lawsuits designed to intimidate and a last-ditch effort to entrench themselves in the form of an equity offering designed to dilute opposition
- Raging River is taking action to protect shareholders on two counts: First, pre-emptive action to halt this dilution by sending a letter to Taseko indicating Raging River is prepared to backstop a rights offering or to provide equity financing of up to C$20 million at a premium to market. Second, Raging River intends to notify the British Columbia Securities Commission and the Securities and Exchange Commission to initiate an investigation into CEO Russ Hallbauer and Vice President Brian Battison for insider trading
Raging River Capital LP ("Raging River"), owning approximately 5.1% of the outstanding common shares of Taseko Mines Limited (TSX:TKO)(NYSE MKT: TGB) ("Taseko"), thanks shareholders for their overwhelming continued support, noting the impact their campaign is already having, and urges vigilance as an increasingly desperate Taseko Board is feeling pressure.
"Let's be clear, if Raging River had not stood up for all shareholders against Hunter Dickinson, the Taseko Board would never have added any new directors - the problem though is that the entrenched, self-interested and, we believe, conflicted Hunter Dickinson-related directors remain and will continue to have significant influence. The only way to effect real change and ensure a Taseko Board you can trust is to replace incumbent directors Ronald Thiessen, Russell Hallbauer and Robert Dickinson with the independent nominees we have put forward on behalf of all Taseko shareholders," said Mark Radzik, Managing Partner of Raging River.
RAGING RIVER'S PRE-EMPTIVE ACTION TO HALT SHAREHOLDER DILUTION
"We have been humbled by the overwhelming support we have received from many shareholders including Vertex One, owning 3.92% of issued and outstanding shares, and remain committed to bringing about the real change that Taseko shareholders want. In that vein, we are deeply concerned that there are increasing signs this board is prepared to move toward an unnecessary private placement or other transaction orchestrated to preserve their seats and dilute Taseko shareholders. Today we are taking steps to prevent that," Radzik said.
In Raging River's view, the Taseko Board has a pattern of disregarding the interests of shareholders, including:
-- Setting the acquisition price of distressed Curis Resources below the
threshold requiring shareholder approval
-- Launching defamation suits to intimidate opposition
-- After spending in excess of $120 million on Prosperity, suing the
Canadian Government to cover their inability to execute the project
Given this pattern of complete disregard for the interests of shareholders and overwhelming support for Raging River, all signs point to the Taseko Board's willingness to initiate an equity offering in an attempt to dilute opposition to Hunter Dickinson related directors.
To prevent a dilutive transaction, Raging River has sent a letter to the Taseko Board indicating that while Raging River is of the view that Taseko does not require any further financing, should the Board decide to proceed with any financing, Raging River would be prepared to provide equity financing of up to C$20 million at a price per security that would be at a premium to the market price of Taseko's common shares. In the alternative, Raging River would be happy to act as a backstop to a rights offering in favour of all shareholders, to demonstrate that Raging River's interests are aligned with all shareholders, without any underwriting or other fee.
"As the conflicted and self-interested Taseko Board swerves erratically to preserve themselves in the form of a highly dilutive transaction, we are putting this guardrail in place to protect shareholders," said Mr. Radzik. "We are happy to further deepen our equity position and alignment with all shareholders because we are convinced that, with the right leadership, this company has enormous potential. No matter how much they threaten us with lawsuits, we won't be intimidated. Hunter Dickinson won't be running this company in three months."
RAGING RIVER INITIATES INVESTIGATION INTO INSIDER TRADING AT TASEKO
As shown in the chart below, Raging River has become aware that Director and CEO Russ Hallbauer and Vice President Brian Battison bought 652,074 shares and 31,000 shares respectively in the month of January, 2016 based on material non-public information of the $70MM Red Kite financing, executed on January 29, 2016 and the filing of a material change report on February 8, 2016.
To view Image 1, please visit the following link: http://www.marketwire.com/library/20160228-1044860-F1gr.jpg
Based on this evidence, Raging River intends to notify the British Columbia Securities Commission and the Securities and Exchange Commission and looks forward to the results of their investigations.
"This once again highlights a major problem in corporate governance. We assume the two executives wanted to profit from the purchase of shares ahead of a significant, material event of liquidity improving at Taseko but this type of transaction should never have been approved by compliance and the board," Radzik said. "Shareholders cannot trust directors and officers who blatantly disregard securities laws and jeopardize the company. It is unfortunate SailingStone did not have access to this information before agreeing to support the incumbent board."
THE STORY OF TASEKO
While Taseko's share price has gone down, payments to Hunter Dickinson related entities have gone up. Taseko has underperformed its peers over the last five years, losing over 95% of its market capitalization as shown below. Since 2012, total fees and investment paid to Hunter Dickinson related entities totals $25.8 million. It's time to put value creation for Taseko shareholders ahead of wealth creation for Hunter Dickinson.
To view Image 2, please visit the following link: http://www.marketwire.com/library/20160228-1044860-F2gr.png
To view Image 3, please visit the following link: http://www.marketwire.com/library/20160228-1044860-F3gr.png
Taseko continues to pursue high-risk, low-probability projects and will do so unless the board changes proposed by Raging River actually happen. Raging River believes the right value creating strategy is to optimize Gibraltar and to find a way forward with Prosperity, a project that requires and compliments the core skills of Gibraltar, but which is unable to move forward because of the complete inability of the present management and board to find a working relationship with the First Nations and the regulators.
Raging River has engaged Norton Rose Fulbright Canada LLP as its legal advisor and Kingsdale Shareholder Services as its strategic and communications advisor and proxy solicitor.
The information contained in this press release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable securities laws. Although the requisitioned general meeting of shareholders has been scheduled to take place on May 10, 2016 (the "Meeting"), shareholders are not being asked at this time to execute a proxy in favour of Raging River's director nominees (the "Concerned Shareholder Nominees") or any other resolution set forth in the requisition. In connection with the Meeting, Raging River intends to file a dissident information circular (the "Information Circular") in due course in compliance with applicable securities laws.
Notwithstanding the foregoing, Raging River is voluntarily providing the disclosure required under section 9.2(4) of National Instrument 51-102 - Continuous Disclosure Obligations in accordance with securities laws applicable to public broadcast solicitations.
This press release and any solicitation made by Raging River in advance of the Meeting is, or will be, as applicable, made by Raging River, and not by or on behalf of the management of Taseko. All costs incurred for any solicitation will be borne by Raging River, provided that, subject to applicable law, Raging River may seek reimbursement from Taseko of Raging River's out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection with a successful reconstitution of the Board.
Raging River is not soliciting proxies in connection with the Meeting at this time, and shareholders are not being asked at this time to execute proxies in favour of the Concerned Shareholder Nominees (in respect of the Meeting) or any other resolution set forth in the requisition. Any proxies solicited by Raging River will be solicited pursuant to the Information Circular sent to shareholders of Taseko after which solicitations may be made by or on behalf of Raging River, by mail, telephone, fax, email or other electronic means, and in person by directors, officers and employees of Raging River or any proxy advisor that Raging River may retain or by the Concerned Shareholder Nominees.
Any proxies solicited by Raging River in connection with the Meeting may be revoked by instrument in writing by the shareholder giving the proxy or by its duly authorized officer or attorney, or in any other manner permitted by law and the articles of Taseko. None of Raging River or, to its knowledge, any of its associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter proposed to be acted on at the Meeting, other than the election of directors to the Board.
Additional information concerning the Concerned Shareholder Nominees is contained in the press release of Raging River dated January 13, 2016.
Taseko's principal business office is 15th floor - 1040 West Georgia Street, Vancouver, British Columbia V6E 4H1.
FOR FURTHER INFORMATION PLEASE CONTACT:
Media: Kingsdale Shareholder Services
Executive Vice President, Communication Strategy
Direct: 416.867.2333; Cell: 647.621.2646