September 27, 2008
Shareholder Files Suit Against Nevada Chemicals
By Brice Wallace Deseret News
A Nevada Chemicals Inc. shareholder has filed a lawsuit seeking to stop the Sandy-based company's sale.Irving S. Braun filed the lawsuit in 3rd District Court and is seeking class-action status. He is suing Nevada Chemicals, its board of directors and several buyout entities in order to stop the sale. The lawsuit claims the sale contains an "inadequate and unfair" tender offer, was handled without full disclosure of all material information and is detrimental to public shareholders.
Nevada Chemicals, through subsidiary Winnemucca Chemicals Inc., owns a 50-percent interest in Cyanco Co., a joint venture that manufactures liquid sodium cyanide, used in the gold mining industry in the western United States. If the proposed buyout is successful, Nevada Chemicals would be acquired by Calypso Acquisition Corp., an affiliate of Cyanco Holding Corp., and OCM Principal Opportunities Fund IV LP, a fund managed by Oaktree Capital Management LP.
The proposed $13.37 price per share of common stock is about a 36 percent premium over the Sept. 5 closing price for Nevada Chemicals. The buyout offer was announced that day.
In addition to class-action status, Braun seeks to halt the buyout until Nevada Chemicals "adopts and implements a procedure or process to obtain the highest possible price for shareholders" and until the company discloses "all material information" to Braun and the proposed lawsuit class.
Nevada Chemicals president and CEO John T. Day said Wednesday that the lawsuit was filed between the time the merger was announced and Friday, when the company filed the tender offer details with the Securities and Exchange Commission.
"This suit was filed without having seen the (later) documentation," Day said. "It wasn't until the 19th, as it was said in the original publication that the information would be filed. So somebody has filed a lawsuit asking for class-action status before the data are even out there, before they're even required by the rules of the SEC."
Nevada Chemicals stock fell a penny Wednesday to close at $13.24. During the past year, the price has ranged from $8.19 to $13.39.
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