Intergeo/Mercator -- summary under S. 86 non-business spin-offs

Overview

Intergeo, a BVI subsidiary of a BVI holding company (Daselina) of a Russian billionaire, which unsuccessfully attempted to go public two years ago, is effecting a reverse (share-for-share exchange) takeover of TSX-listed Mercator pursuant to a BCBCA Plan of Arrangement, with Daselina also subscribing U.S.$100M for Mercator shares, so that Daselina will own approximately 85% of the post-reorganization Mercator (a.k.a., the Resulting Issuer) and the Resulting Issuer will own 100% of Intergeo. One Special Share will be issued to each of Daselina and another BVI company with a minor common share holding in the Resulting Issuer (Kirkland), which will provide that they have the right to nominate only three of the nine board members (but with the other six being nominated by the board itself) – but also give them veto rights on major decisions. In order to maintain the public float, Daselina presumably does not wish to buy out the existing shareholders. However, to placate them, they are to be issued (under a s. 86 reorganization) the right to put their Common Shares to the Resulting Issuer for $5.00 per share (the equivalent of $0.10 per share before giving effect to a proposed 50-for-1 share consolidation) during an exercise window of 18 to 30 months following the Effective Date of the Plan of Arrangement, with $31.7M being placed into an escrow account to secure this contingent obligation.

For full summary, see under Mergers & Acquisitions - Cross-Border Acquisitions - Inbound - Reverse takeovers.