WEST PALM BEACH, FL (www.hedgeco.net) The Wisconsin based U.S. Hedge fund manager, Stark Investments called on the Ontario’s Securities Regulator to intervene in merger plans of a mining company withits parent, company Noranda Inc. According to Stark Investments, such merger will negatively affect its interests; the firm disclosed further that it has significant holdings in Falconbridge Ltd.Meanwhile, Falconbridge Ltd., quickly moved to dismiss such concerns.
Stark investments hopes the Ontario Securities Commission will intervene in the merger plans, by asking Falconbridge Investments to obtain new fairness opinion. The fairness opinion estimated Falconbridge shares is worth about $4 more than the current estimates stated in the fairness opinion.
Denis Couture, Falconbridge spokesperson said in an interview, “We don’t know exactly what (Stark’s) after, what you need to understand … is that they’re a hedge fund. … They typically are not long-term investors.� Coture added, “Now they’re expressing their concerns. If you know the kind of operations that hedge funds have, you can draw your own conclusions on their objectives.”
According to the existing fairness opinion, Falconbridge minority stockholders would receive 1.77 Noranda shares for each Falconbridge share. Couture also explained that the deal is fair, he said, �Everybody would like to get a bit more, but the deal has been well received by the financial community.”
A Lawyer representing the U.S. based Stark Investments, Joseph Groia said, �That it is not important whether the fund is a long-term or short term investor.� Groia said, “We’re really speaking up on behalf of all Falconbridge investors. The issue is whether this offer is fair, and perceived to be fair.� According to Groia, �There are a number of mistakes uncovered in the original valuation which if corrected will boost the Falconbridge shares to up to $8 dollars.�
Stark is hoping the Ontario Securities Commission will extend the deadline for the completion of the merger talks by convening a hearing for Wednesday. It is unclear what position the Commission will take on the issue.
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Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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