Hi @cgdog A very good question and I was somewhat stunned myself to see the lengths to which WES's lawyers had gone to draft such a restraint to attempt to give WES 100% exclusivity here. As a lawyer myself I thought they had gone too far and that it could be struck down in a court for the reason you said, but I also read it as WES being bullies and the KDR main holders and BOD being very keen to sell, and so they gave in on that to get WES over the line. I doubt we will see many more of these types of restraints in future lithium M&A activity in Australia as the marketplace will change after this deal. The KDR BOD have been very diligent in promoting their obligations to WES here, no doubt because they do not want to trigger WES reneging or suing them, but the fact of this recent release also raises the question: Why issue it? The answer is because they have somebody or bodies sniffing around and the KDR BOD do want a superior offer and are obliged to get one if it arises, so they needed to get legal clarification of this restraint on them so they could pass the interest onto SQM for them to react as they see fit. In addition KDR is obliged to advise its shareholders of this legal clarification and their attempts to promote any new deal without breaching the WES restraint, albeit in a very obtuse and ambivalent release. In other words, if there was no interest from any third party, this release would not have happened IMO. Is SQM interested in another third party? I have no idea but what I do know is that WES maybe has just started to squirm a little and the KDR release had that intention. WES cannot enforce their restraint as much as they would like as I believe it is too draconian and I sense their own lawyers know that. The final Act of this play has yet to be played out.
KDR Price at posting:
$1.88 Sentiment: Hold Disclosure: Held
