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Kinross Gold (KGC) Takes Up New Shareholder Rights Plan

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Kinross Gold Corporation KGC adopted a new shareholder rights plan, replacing the current one. The new plan will be effective from Mar 29.

The new plan has been designed to ensure that shareholders get equal opportunity to take part in a takeover bid and receive full and fair value for the common shares of the company. It also ensures that the shareholders of Kinross Gold continue to reap the benefits of the current plan.

Notably, the plan includes amendments to the legislative framework governing takeover bids in Canada, which came into force in 2016, including extending the minimum bid period to 105 days from 35 days earlier. Also, all non-exempt takeover bids will have to satisfy a minimum tender requirement of more than 50% of the outstanding securities held by independent shareholders and requiring an extension of minimum 10 days after the minimum tender requirement criteria is satisfied.

Moreover, a target issuer also has the ability to voluntarily lessen the minimum bid period, but not less than 35 days, or it may be automatically reduced in case the board chooses to advance with an alternative change of control transaction.

The rights issued under the new plan initially relate to and trade with the common shares and will become exercisable only when an individual (including any party related to it) attempts to or acquires 20% or more of the outstanding shares without complying with the provisions of the plan or without approval of the board of directors. In case of acquisitions or announcement of acquisition, each right will, upon exercise, entitle a rights holder, other than the acquiring individual (and related persons), to acquire the common stocks at 50% discount to the market price at that time.

Subject to the receipt of necessary regulatory approvals and shareholder ratification at the special and annual meeting of shareholders on May 9, 2018 as well as shareholder reconfirmation at annual shareholder meetings in 2021 and 2024, the plan will remain effective until the conclusion of the company’s annual shareholder meeting in 2027.

Shares of Kinross Gold have lost 15.3% in the past three months, underperforming the industry’s 9.6% decline.

 


 

Zacks Rank & Key Picks

Kinross Gold currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are LyondellBasell Industries N.V. LYB, CF Industries Holdings, Inc. CF and Daqo New Energy Corp. DQ, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

LyondellBasell has an expected long-term earnings growth rate of 9%. Its shares have moved up 11% over the last six months.

CF Industries has an expected long-term earnings growth rate of 8%. Its shares have gained 4.8% over the last six months.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have rallied 62.3% over the past six months.

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