The advantages of the right of first refusal are in favour of the potential buyer to whom the agreement is to be offered. In addition, the right of pre-emption ensures that an unknown stranger cannot enter into a transaction against your will. In general, that is the main reason for these provisions. A start-up can ensure that its agreement will contain a ROFR if it realizes that its senior partner will likely leave the project first. Under these conditions, a ROFR may give them the opportunity to consider themselves a more desirable partner than the proposed buyer, as was the case with New Gold. However, as with management companies, a ROFR may affect the value of a junior`s interest if he first tries to leave the project. Indeed, the depressive effect can be significant when it is common knowledge that the senior has the financial capacity to exercise the PSR, since potential buyers may decide to save time and the burden of participating in a price reduction process when the RRR can be exercised in all cases. Goldcorp first wanted to acquire 100% of the El Morro project by first taking the 30% stake in New Gold (including ROFR on Xstratas 70%) purchased and then exercised roFR to acquire the remaining 70% at a fixed price of $463 million. However, it quickly realized that such a transaction was excluded by the fact that Xstrata held a reciprocal ROFR compared to The 30% of New Gold. Therefore, any attempt to acquire the 30% of the new gold would give Xstrata (and thus Barrick) the opportunity to acquire and consolidate 100% of the ownership of the asset. If the right of pre-emption is guaranteed to you by contract, you must be informed at all times of a firm offer to make a specific transaction – usually immediately as soon as the transaction is on the table. When it comes to selling a particular asset, you can simply adjust the best offer to buy yourself.

In the event of a share issue, you usually get the first opportunity to acquire shares at the offered price before opening the offer to other investors. „News feeds provide us with the latest legal analysis and practical information. There seems to be a comprehensive analysis that is beneficial to us in the analysis of different legal areas. It offers a quick-fire update of various legal developments and helps us stay informed. The items are well covered and contain the right amount of detail. The size and depth of the items are also good, so we can get the information you need very quickly. The articles are generally of pure quality and by high-level authors who provide articles concise enough to learn a lot about new developments in a short period of time. I like the format because it`s easy to scan relevant articles. It`s a great tool. I like the fact that you can customize news feeds based on jurisdiction and workspace, and receive only information relevant to your practice. The rights of the first refusal (ROFR) are common in partnership, joint venture and shareholder agreements entering the mining industry.1 A ROFR is engaged on a large scale when a party attempts to exit the project.

Share →