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Meeka Metals (ASX:MEK) has, according to The Australian, lobbed a takeover offer at New Murchison Gold (ASX:NMG), which has been rejected – causing some confusion on Monday as both companies continued to trade.
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Normally, there’d be a trading halt on both sides as the companies were forced to explain to their shareholders what was going on. But as of midday Monday, both companies were simply trading like normal.
On HotCopper and elsewhere online, the general feeling was that, despite the reports in the Australian ‘Data Room’ column, the ASX mightn’t be satisfied the takeover bid, and rejection, happened formally.
And given the article that ran on Sunday, that is probably the case. How’s this for an opening line: “New Murchison Gold is understood to have fielded a buyout proposal from the $400m gold and rare earths company Meeka Metals, say sources.”
Sources indeed. At any rate, technicalities around trading halts aside, the news does seem to indicate NMG could be at the start of a bidding war.
Worth noting here is that Meeka holds around 15% of the company.
And to be fair, that proposed takeover could be the best outcome for NMG shareholders, at least for anybody holding on long-term. New Murchison gold is up nearly +220% YoY, but that brings it to a share price of 1.8cps.
But the real kicker is that NMG has over ten billion shares on issue.
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Still, though, with gold prices what they are – currently around A$5K/oz, you can’t blame a company for wanting to hold on and try and make it work on its own.
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