A whopping 99.14% of NovaGold (NG) shareholders voted in favor of the company’s spinoff of its Ambler copper project known as NovaCopper at a shareholder meeting earlier this week. Not much of a surprise given the support of several large proxy firms and the lack of any vocal opposition. The spin is expected to be completed ‘on or about’ April 30th and NG shareholders will receive 1 share of NovaCopper for every 6 shares of NovaGold owned.
For some additional information on the Ambler project, check out this presentation being given by CEO and President Rick Van Nieuwenhuyse and for more information on the spin take a look at our earlier posts on the subject here.
Disclosure: Author holds no position in any stock mentioned.
Can someone provide a link to SEC Form 10 please? Thank you.
http://sec.gov/Archives/edgar/data/1173420/000120445912000642/exhibit99-1.htm
WSJ, section B, 4/14/2012 article noting “Copper Price Hits A 3-Month Low”. China is the worlds top consumer of copper and is expanding more slowly than expected (8.1% vs. 8.3% expected). China used 40% of worlds output last year.
Does it seem like NG is just getting rid of the fat before abx buys them out? CEOs do not jump to the spin for no reason. Greg Lang, the new CEO of NG was a high level executive at 2 other companies that ABX bought. How long before ABX makes a bid?
The idea of an ABX takeout is certainly possible and a popular theory out there related to the NG spin. Potential takeouts are an oft cited benefit of spins, but in general, I am hesitant to invest for M&A reasons alone.
I agree there are usually reasons for CEOs to jump to a spin, but the problem is that we don’t really know what those reasons are. While the move is often viewed as a positive (they know more about the company etc.), it’s really just conjecture. Although if you like the job a CEO has done then I am sure you will find it a positive. Again, it’s worth noting and a good data point, but generally not buying something solely because of CEO movement.