Join our daily newsletter At The Bell to receive exclusive market insights
- In a statement released today, Directors of Cardinal Resources (CDV) have urged shareholders to accept the latest takeover bid from Shandong Gold
- After a lengthy back-and-forth battle with NordGold SE, China’s state-owned Shandong made a revised offer on September 7
- According to the details of the bid, Shandong would wholly acquire Cardinal for $1.00 per share
- This is a premium over NordGold’s latest offer, which was proposed on September 2, of $0.90 per share
- Cardinal Resources closed 2.38 per cent in the red for $1.02 per share
In a statement released today, Directors of Cardinal Resources (CDV) have urged shareholders to accept the latest takeover bid from Shandong Gold.
The latest offer from the Chinese state-owned gold mining company comes after a lengthy back-and-forth battle with UK-based NordGold SE.
It began in mid-March this year when NordGold made an offer to acquire all of Cardinal’s shares, of which it currently holds 28.5 per cent, at a price of 45.78 cents each.
Shandong then made its first move on June 18, proposing its acquisition of Cardinal’s shares at a price of $0.60 per share – a 31.1 per cent premium over NordGold’s offer.
Since then, the two companies have made a number of increasing takeover bids, culminating in Shandong’s latest offer of $1.00 per share, which was lodged on September 7 and values Cardinal at approximately $565.6 million.
This represents an 11.1 per cent premium over NordGold’s highest offer of $0.90 per share, and has been unanimously supported by Cardinal’s board. However, this remains subject to the receipt of a superior proposal.
There had previously been concern over Shandong’s ability to secure Foreign Investment Review Board (FIRB) approval for the acquisition, but any skepticism was quashed on August 20 after the company received the go-ahead.
While there are a number of standard market approvals yet to be received, including a minimum of 50.1 per cent acceptance from Cardinal’s shareholders, the company’s board is confident that the transaction will go through.
In yesterday’s statement Cardinal’s Board said it “has no reason to believe that the remaining conditions of the Shandong Gold offer cannot be satisfied within a reasonable timeframe”.
In the event that the Shandong takeover is completed, Cardinal expects to have incurred roughly $36.1 million in transaction costs, due primarily to fees payable to certain advisors that increase in line with growing bids.
Cardinal Resources closed 2.38 per cent in the red for $1.02 per share.
