Goose ready to spread wings

COMMENT

It’s only a small step but there’s finally some good news out of Dundee Corp., the holding company that has interests in a slew of industries including investment advisory, corporate finance, energy, resources, real estate and infrastructure.

The good news: an investment Dundee made in a newly formed unit more than four years back seems set to go public by way of a reverse takeover with a Gulfstream Acquisition 1 Corp., a capital pool company whose shares are listed on the TSX-Venture Exchange.

This week Gulfstream announced it had signed a nonbinding letter of intent with Blue Goose Capital Corp. (Dundee acquired a majority stake in Blue Goose in 2011, soon after creating Dundee Agricultural.) Plans call for that intent to be turned into a definitive agreement.

For Gulfstream the proposed acquisition will be its qualifying transaction given that it is buying Blue Goose. Once the merger is completed, Blue Goose will become a public company and Dundee will have monetized one of its investments.

Blue Goose, whose net assets in Dundee’s last annual report ( March 2015) were listed at $86.13 million, is focused “on the production, dis- tribution and sale of organic and natural beef, chicken and fish.” Dundee has an 87-percent interest in Blue Goose, which has operations across Canada: It has organic beef cattle operations and a haymaking business in B.C.; and an organic and natural poultry business as well as a fish farming business in Ontario.

Blue Goose, which has been around since 1992, was formed “with one man’s desire to feed his family clean and nutritious protein, and the belief that if you look after your land and animals, they will look after you.” In each of the last financial years Blue Goose has posted a loss.

For the qualifying transaction to proceed, a number of steps have to be taken: Blue Goose has to raise $ 20 million; the two sides have to complete their due diligence; the shareholders of Blue Goose have to approve the deal; and the TSX-Venture has to sign off.

The proxy battle being fought by Raging River, a shareholder and bond holder at Taseko Mines — is similar to many others that have occurred over the years: The dissident wants change at the company mainly because of either management’s poor performance or governance issues; the company typically resists; and the fight goes on until its clear that one side is set for victory.

Along the way there’s lot of mud slinging. Thursday was no exception. In the morning Taseko issued a statement saying Raging River had failed to disclose a corporate bankruptcy of one of “its proposed nom- inees for Taseko’s Board.” (In the afternoon Taseko made a second release announcing the resignation of one of its directors “effective immediately.”)

In its first release, Taseko said Raging River “explicitly denied” the i nvolvement of its four director nominees with any bankruptcies within the previous 10 years, a requirement under Canadian law. In that release, Taseko included an attachment detailing the bankruptcy settlement agreement with one of Raging River’s nominees.

By the afternoon, Raging River indicated it is “commencing a defamation lawsuit with the objective of elevating the tenor of the debate to focus on the real issues of Taseko.”

Given that the meeting date is May 10, there’s lots of time for more arrows to be fired by both sides.