Page 13 of 18 SEC Filing
The Reporting Persons engaged Cowen & Company, a registered broker-dealer, to execute the purchase of the Common Shares in the open market. The Reporting Persons acquired the Common Shares for investment purposes because they believed the Common Shares represented an attractive investment opportunity. The Reporting Persons have had and intend to have discussions with management of the Issuer (Management) relating to, among other things, the Issuers corporate governance, capital allocation (including financing alternatives), capital structure, the size and composition of the Board and strategic alternatives.
On January 13, 2016, Raging River requisitioned a meeting of shareholders: (i) to remove, by special resolution, each of Ronald Thiessen, Russel Hallbauer and Robert Dickinson as directors of the Issuer (the Director Removal Resolution); (ii) if the Director Removal Resolution is passed, to set the number of directors at nine (9) and to elect Raging Rivers nominees Blythe, Randy Davenport, Park and Radzik as new directors (the Concerned Shareholder Nominees); and (iii) if the Director Removal Resolution is not passed, to set the number of directors at twelve (12) and elect the Concerned Shareholder Nominees. A copy of the shareholder meeting requisition notice is filed as Exhibit 99.4 to this report.
If elected, the Concerned Shareholder Nominees will (i) align the board of directors of the Issuers (the Board) interest with those of the Issuers shareholders, including by performing a strategic review, assessing management compensation and evaluating the relationship between Taseko and Hunter Dickinson going forward; (ii) increase shareholder value by working together with the Issuers stakeholders to evaluate opportunities to reduce liabilities, divest non-core assets and move projects forward; and (iii) focus on managing the Issuers balance sheet debt and position the Issuer to take advantage of the rebound in copper prices.
On February 29, 2016, Raging River sent a letter (the Financing Letter) to the Issuer stating their general view that the Issuer did not require financing but that, if the Board determines to proceed with any financing, Raging River would be prepared to provide financing of up to CAD$20 million. A copy of the Financing Letter is filed as Exhibit 99.5 to this report.
In December 2015 and January and February 2016, the Reporting Persons acquired the Issuers 7.75% senior notes due 2019 with an aggregate cost of $6,040,323 (excluding accrued interest) (the Notes). In addition to the Notes acquired by the Reporting Persons, Raging River Capital 2 LLC (RC 2 LLC), a Delaware limited liability company established solely as an investment vehicle for Notes of the Issuer, acquired in December 2015 and February 2016, the Issuers 7.75% senior notes due 2019 with an aggregate cost of $2,873,737 (excluding accrued interest) (the Additional Notes). RC 2 LLC does not own any securities of the Issuer other than the Additional Notes. RC 2 LLC acquired the Additional Notes for investment purposes because it believed that they represented an attractive investment opportunity. Raging River, Granite, Westwood and Blythe Mining are Members of RC 2 LLC, but only have an interest in the Additional Notes if sold.
The Reporting Persons intend to discuss such matters identified above not only with Management and the Board, but also with other shareholders of the Issuer and third parties and may take other steps to bring about changes to increase shareholder value, including but not limited to changes involving Board composition, as well as pursue other plans or proposals that relate to or would result in any of the matters set forth in clauses (a) through (j) of Item 4 of Schedule 13D.
The Reporting Persons intend to review their investments in the Issuer on a continuing basis. Depending on various factors, including, without limitation, the Issuers financial position and strategic direction, actions taken by the Board, price levels of the Common Shares, other investment opportunities available to the Reporting Persons, concentration of positions in the portfolios managed by the Reporting Persons, market conditions and general economic and industry conditions, the Reporting Persons may take such actions with respect to their investments in the Issuer as they deem appropriate, including, without limitation, purchasing additional Common Shares or other financial instruments related to the Issuer or selling some or all of their beneficial or economic holdings, engaging in hedging or similar transactions with respect to the securities relating to the Issuer and/or otherwise changing their intention with respect to any and all matters referred to in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
a) The aggregate percentage of Common Shares reported to be beneficially owned by the Reporting Persons is based upon 221,808,638 Common Shares outstanding as of February 22, 2016, which is the total number of Common Shares outstanding as of February 22, 2016, as reported in the Issuers Management Discussion and Analysis on Form 6-K filed on February 24, 2016.
At the close of business on March 7, 2016, the Reporting Persons may be deemed to beneficially own 13,900,100 Common Shares, constituting approximately 6.3% of the Common Shares outstanding.
b) RC LLC has shared voting power and shared dispositive power over the 13,900,100 Common Shares held by Raging River, by virtue of RC LLCs role as the general partner of Raging River, and accordingly, RC LLC may be deemed to be a beneficial owner of such shares. Each of Granite, Westwood, Blythe Mining and Nathan Milikowsky have shared voting power and shared dispositive power over the 13,900,100 Common Shares held by Raging River, by virtue of their role as managing members of RC LLC, and accordingly, each of Granite, Westwood, Blythe Mining and Nathan Milikowsky may be deemed to be a beneficial owners of such shares. Each of Mark Radzik, Henry Park and Paul Blythe have shared voting power and shared dispositive power over the 13,900,100 Common Shares held by Raging River, by virtue of Mr. Radziks role as the Principal of Granite, Mr. Parks role as the Principal of Westwood and Mr. Blythes role as President of Blythe Mining, and accordingly, Mr. Radzik, Mr.Park or Mr. Blythe may be deemed to be a beneficial owner of such shares.
13
