Securities regulators stall Bresea bid

  MacDonald Oil, whose common stock last traded over-the-counter on the Canadian Dealing Network at eight cents, has offered Bresea shareholders one convertible preferred share and one warrant of MacDonald Oil for each Bresea share.

  MacDonald Oil's bid expired Monday.

  The company said 22 million Bresea shares -- 61 per cent of those eligible under the offer -- were tendered by the deadline. Those not eligible for regulatory reasons included stockholders in Quebec, B.C. and the United States. MacDonald said it would seek court approval to extend the offer to those jurisdictions.

  Monday's cease-trade order in Ontario and Alberta "was granted because there was insufficient disclosure to Bresea shareholders to make an informed decision," said Frank Switzer, a media relations officer with the Ontario Securities Commission.

  Calgary-based Bresea was placed under court protection in May 1997 after it and sister company Bre-X Minerals collapsed in the wake of an enormous fraud at a Bre-X gold-mining site in Indonesia.

  Bresea retains about $26 million in cash, plus a $3-million building in northwest Calgary.

  Switzer said there are currently no directors at Bresea to advise investors regarding MacDonald Oil's bid.

  A hearing will be held in about 15 days so the Alberta and Ontario securities commissions, along with MacDonald Oil, can try to determine how to ensure Bresea investors can make an informed decision, Switzer said.

  He added that the regulators also had concerns about gaps in the information in MacDonald Oil's takeover circular, and the fact that the lastest disclosure for Bresea was released about a year ago.

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