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Showing posts from November, 2017

OMG, LOL, WHY!

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TGIF!  West High Yield (TSXV:WHY) issued a news release today after the close.  In a nutshell, here is what it said:

The buyer, Gryphon Enertprises, LLC was formed for the purpose of acquiring assets.  They have no assets and it isn't worth suing them if they screw us over.  The buyer has hired an "arranger" to raise the USD $750 million, but there are no firm commitments or arrangements to fund the transaction.Listing Baker Mackenzie as the buyer's law firm was an error.  What kind of clown show is this?  Lawyers play a pretty key role in any real deal, so how does a law firm get listed in error?WHY has not yet received the USD $500,000 deposit.  Don't bother checking the bank account over the weekend Frank, as you've already told us that Gryphon doesn't have any assets.They have no clue how a take or pay commitment would work.  Guys, that should be the least of your concerns.  This deal is similar to me selling my house to a homeless guy for $500 million…

Washington Post picks up the West High Yield story as the deposit deadline looms

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It has almost been a month since West High Yield (TSXV:WHY) announced its ridiculous deal to sell its mining assets for $750 million USD (link).  The first and most obvious thing that didn't add up on this deal was the astronomical valuation, USD$750M for a CAD$21M market cap company by a Maryland corporation with no apparent business or history.  Digging a little deeper, the purchase and sale agreement made no sense and was impossible to execute and the purchaser's law firm, Baker Mackenzie, has no knowledge of the deal.  While the WHY news release refers to the sale of the Record Ridge South and O.K. Mineral Assets, the purchase and sale agreement requires WHY to deliver 100% of the corporation's shares, which is impossible for a publicly traded company.  The purchase and sale agreement also requires take or pay agreements to be put in place before the closing date, although it doesn't specify what or how much.  Minor detail, I guess!

The size of the deal and the dub…