Eastplats appeals to shareholders to vote against board takeover

JOHANNESBURG (miningweekly.com) – TSX- and JSE-listed Eastern Platinum (Eastplats) has asked its shareholders to fend off a potential board takeover at the company’s upcoming annual general meeting on July 5.

Eastplats noted in a statement to shareholders that a recently incorporated Hong Kong-based company Ka An Development had said it intended to nominate six new directors to replace the incumbent Eastplats board members.

Ka An on May 5 entered into an agreement with Invesco Canada to buy the 12.78-million shares it held in Eastplats, representing about 13.79% of Eastplats’ shares in issue.

Further, a Toronto-based hedge fund K2 Principal Fund had advised Eastplats that it reserved the right to nominate six new directors to replace the incumbent board.

“Neither of the dissident shareholders, nor their nominees, have formally engaged with Eastplats and, as a result, we are not aware of any change in strategic direction that either of these dissidents might propose.

“Based on a preliminary review, Eastplats believes the dissidents’ nominees are not as qualified as the incumbent board of directors. In particular, none of the dissidents’ nominees has disclosed experience directly relevant to the mining of platinum in South Africa,” Eastplats stated.

The company asserted that the dissident shareholders were only interested in benefiting themselves by taking control of Eastplats’ assets and treasury, without paying other shareholders a premium for that control.

Eastplats chairperson, president and CEO David Cohen has called on shareholders to support the incumbent board, stating that: “The strategy set by the incumbent board has preserved our assets and balance sheet in an extremely challenging market, avoiding dilution and delivering one of the best share price performances in the sector.”