BRAZIL The world's largest producer of iron ore and pellets, COMPANHIA VALE DE RIO DOCE (CVRD) of Rio de Janeiro has stated its intention to make an offer to acquire all of the outstanding common shares of Vancouver-based CANICO RESOURCE CORP. Canico's major asset is its Ona Puma nickel laterite project in Para state. The Installation Licence, allowing the construction of a mine and related facilities, has just been granted.
CVRD is offering Cdn$17.50 in cash for each Canico common share, an amount CVRD notes is a 29% premium over the share price of the preceding 30 days on the TSX. Under the terms of the offer, CVRD intends to make its offer a "permitted bid" under Canico's shareholder rights plan. Accordingly, the offer will be open for acceptance for at least 60 days following a mailing, and no Canico common shares will be taken up and paid for pursuant to the offer unless, at such date, more than 50% of the then outstanding Canico common shares held by independent shareholders have been deposited pursuant to the bid and not withdrawn. Should this condition be met, CVRD will make a public announcement of that fact on the date the offer would otherwise expire, and the offer will be extended for a period of not less than 10 business days.
On Sept. 16, a day after CVRD made its intentions known, Canico management said it had not yet received the formal offer. Until such materials are received, the board neither supports nor rejects CVRD's offer.
The companies maintain websites are www.Canico.com and www.CVRD.com.br.