Toronto-PhosCan Chemical Corp. said Sept. 24 that its board of directors has approved the adoption of a Shareholders Rights Plan, effective immediately. The purpose of the plan is to provide shareholders and the board with additional time to assess and evaluate any unsolicited bid for the company, and to provide the board with adequate time to identify, develop, and negotiate alternatives to any unsolicited bid in order to maximize shareholder value. The plan is not intended to block takeover bids for the company that treat shareholders fairly, and is not being adopted in response to any proposal to acquire control of the company. The rights issued under the plan only become exercisable if a person, or a group of persons acting collectively, acquires 20 percent or more of the outstanding common shares of the company without complying with the permitted bid provisions of the plan. A permitted bid is a bid that meets certain specified conditions, including that the bid is made to all common shareholders by way of a takeover bid circular that remains open for a period of not less than 60 days; that no shares may be taken up and paid for unless more than 50 percent of the common shares held by independent shareholders are deposited and not withdrawn; and that the bid will remain open for a period of 10 days after the bidder announces that more than 50 percent of the shares held by independent shareholders have been taken up and paid for. In the event that a takeover offer does not comply with the permitted bid provisions, rights holders may purchase common shares of the corporation at 50 percent of the prevailing market price at the time the rights become exercisable. Shareholder ratification of the plan will be solicited at a shareholders’ meeting to be held on or before March 24, 2009. If ratified, the plan will have an initial term of three years. If not ratified at the meeting, the plan will terminate and cease to be effective. PhosCan is engaged in the development of the Martison Phosphate Project, which consists of the Martison Phosphate Deposit and a planned phosphate mine, beneficiation plant, phosphoric acid plant, and solid fertilizer production facility. The Martison Deposit is located 70 kilometers north of Hearst, Ont.
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