TORONTO – Dundee Corp. (TSX:DC.A) is threatening legal action to block the planned, US$9-million sale by Formation Metals Inc. (TSX:FCO) of its precious metals refinery in Idaho.
Dundee, which believes itself to be Formation’s largest shareholder with 17 per cent of its stock, describes both the planned sale and the selling price as “improvident.”
The Toronto-based holding company said Monday that “for reasons unknown to Dundee,” Formation is rushing to close the sale to Waterton Global Resource Management Inc. by June 20, the day before its annual and special general meeting of shareholders.
“Dundee is of the opinion that the proposed sale of the refinery and the sales price are improvident and not in the best interest of Formation and its shareholders,” the company said in a release.
“In addition, Dundee is of the opinion that the sale of the refinery requires the approval of the Formation shareholders, being a sale of substantially all of the assets and undertaking of Formation when measured on either a quantitative or a qualitative basis.”
As a result, Dundee said it would begin legal proceedings to enjoin the sale of the refinery unless the sale receives the requisite shareholder approval.
“Such proceedings would likely include an action against the current directors of Formation for breach of their fiduciary duty to Formation,” it said.
Meanwhile, Dundee said it would not support the re-election of two management director nominees, chairman and CEO Mari-Ann Green and president Scott Bending, and is considering organizing a dissident proxy solicitation.
Dundee, through its operating subsidiaries, including Goodman & Company, Investment Counsel Inc., is engaged in diverse business activities, including investment advisory, corporate finance and private equity investment in real estate and infrastructure, energy, resources and agriculture.