News

June 24, 2009

High River Gold Shareholders Combine To Reject Severstal’s Buyout Offer As Too Low

By John Helmer in Moscow

The buyout offer for minority shareholdings in Toronto-listed High River Gold (HRG:TSX) now looks double-doomed. A combination of minority shareholders has now formed that is numerically strong enough to prevent the Russian Severstal group, owned by Alexei Mordashov, from succeeding in his C22 cent offer for the 42.7 per cent of High River shares he doesn't already control. And Mordashov himself, and his Severstal group, appears to be under strict bank loan covenants which preclude any new deal.

HRG will hold its annual general shareholder meeting on June 30 in Toronto. Although the buyout bid has been the dominating topic of shareholder talk for weeks - Mordashov raised his offer from 18 Canadian cents to C22 cents on June 9 - no action on that issue is expected. In the meantime, there have been threats of litigation against Severstal and the HRG management, while the Ontario Securities Commission is considering a shareholder complaint filed on April 24. An HRG board deadline for a...