Two leading independent proxy advisory firms have recommended that shareholders of TSX-listed eCobalt vote in favour of its upcoming merger with Australian battery minerals developer Jervois Mining (ASX: JRV), despite the recent opposition from First Cobalt.
Jervois today announced to the market that firms Institutional Shareholder Services Inc (ISS) and Glass Lewis & Co, which provide voting recommendations to institutional investors, have released reports recommending the merger.
This merger follows the company’s recently completed merger with M2 Cobalt, and if the deal goes ahead, Jervois will become the world’s third largest cobalt miner.
However, First Cobalt, which holds a 5.8% shareholding in eCobalt, issued an open letter to eCobalt shareholders in June asking them to reject the merger as they would get “nothing of value in return” for giving up 53% of the company.
Earlier this month, Jervois responded to the opposition, calling First Cobalt’s claims “self-serving”, “false” and “misleading”.
Today, Jervois said a second press release issued by First Cobalt is again “making false and dishonest claims” about the merger.
“It is unfortunate that [First Cobalt] continues to attempt to mislead by serving its own agenda that is not aligned with all eCobalt shareholders,” Jervois stated.
“Not only has the board of directors of eCobalt unanimously voted to approve the merger, but both ISS and Glass Lewis have also unequivocally recommended eCobalt shareholders vote for the merger,” it said.
According to Jervois, the merger will create a “premier cobalt investment vehicle by combining two companies with strong development stage cobalt assets, a global project pipeline of attractive development and exploration projects focused on cobalt, nickel and copper, and importantly, the financial strength to advance all of these opportunities”.
In its report, ISS stated eCobalt shareholders should “vote for this transaction as the company is in much need of financing”.
Glass agreed that the merger was in the “long-term interests” of eCobalt and its shareholders.
According to Jervois, one consideration Glass noted in its recommendation of the deal included eCobalt’s aggressive but unsuccessful efforts to obtain additional funding to continue advancing its Idaho cobalt project study in light of the recent weakened cobalt price.
Glass said other reasons to favour the merger included “the equity premium, as well as the continued participation in any value increases associated with eCobalt’s projects given the meaningful stake in the combined entity”.
Jervois shareholders are expected to vote on the merger this Thursday morning in Melbourne, with eCobalt shareholders due to vote on the Friday morning in Vancouver, Canada.