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Canada's Cornerstone looks to replace BHP-backed SolGold's board

Cornerstone Capital Resources Inc said on Wednesday it intends to urge SolGold Plc shareholders to replace the company's entire board, a day after rejecting the London-listed miner's takeover offer for the second time.

Adds details from the release, chairman quote, background

July 15 (Reuters) - Cornerstone Capital Resources Inc CGP.V said on Wednesday it intends to urge SolGold Plc SOLG.L shareholders to replace the company's entire board, a day after rejecting the London-listed miner's takeover offer for the second time.

Cornerstone has an 8% stake in SolGold, making it the BHP Group BHP.AX, BHPB.L-backed company's fourth-biggest shareholder.

"The current SolGold Board is incapable of managing the affairs of SolGold for the benefit of all shareholders in a prudent and transparent manner," said Greg Chamandy, chairman of Cornerstone, in a statement.

The proposed Franco-Nevada royalty financing will significantly destroy shareholder value for all SolGold shareholders, Chamandy added.

SolGold in May had announced a financing package of up to $150 million with streaming company Franco-Nevada Corp FNV.TO to develop its Alpala project, a copper-gold deposit in northern Ecuador.

The Canadian copper and gold miner said it expects the SolGold's new board to carefully review the terms of the Franco-Nevada financing package and take appropriate action to terminate the deal if it is not in the best interests of SolGold and its shareholders.

SolGold made an all-stock transaction offer of 11 SolGold ordinary shares for each Cornerstone share late in June after its earlier proposal in 2019 was rejected on grounds that it undervalued the Canadian company.

Cornerstone said on Tuesday about 65% of its shareholders would not support SolGold's second offer.

SolGold did not immediately respond to Reuters request for comment. Shares of the London-listed jumped 5% to 22.20 pence by 1139 GMT.

(Reporting by Shanti S Nair and Shanima A in Bengaluru; Editing by Amy Caren Daniel)

((ShantiS.Nair@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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