CGX establishes shareholders’ rights plan

CGX Energy Inc has announced that shareholders have adopted a rights plan designed to ensure fair and equitable treatment amongst them regarding any take-over bid for the outstanding securities of the company.

In a press release, CGX said the Rights Plan provides the Board of Directors with 60 days to assess a take-over bid, to consider alternatives to a take-over bid as a means of maximising shareholder value, to allow competing bids to emerge and to provide the shareholders with adequate time to properly assess a take-over bid without undue pressure.

The Rights Plan is similar to plans adopted by other Canadian companies and ratified by their shareholders. The Board also said it is not currently aware of any pending or threatened take-over bid for the company but it believes the company’s shares are significantly undervalued.

According to CGX, under the terms of the Rights Plan, one right (a “Right”) is issued in respect of each outstanding CGX common share at the close of business on Friday and in respect to each CGX common share issued thereafter (subject to the terms of the Rights Plan).

The rights issued under the Rights Plan become exercisable only if a person acquires or announces its intention to acquire 20% or more of the company’s common shares without complying with the “permitted bid” provisions of the Rights Plan or without the approval of the CGX Board.

“Should such an acquisition occur, the Rights holders (other than the acquiring person or related persons) can purchase common shares of the Company at a substantial discount to the prevailing market place (as defined in the Rights Plan) at the time the Rights become exercisable,” the release said.

The Rights Plan was confirmed at CGX’s annual and special meeting of shareholders on June 23, and is subject to be re-confirmed at every third annual and special meeting of the shareholders thereafter.

A copy of the Plan is available for view at the website

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