- Singapore-based Golden Investments is not giving up its fight for control of Stanmore Coal (SMR)
- The Golden Energy and Resources subsidiary launched a fresh takeover bid for all Stanmore shares today
- In late 2018, Golden Investments made an unsolicited takeover offer which Stanmore directed
- Now, with Stanmore having finished some leadership shuffles, Golden Investments if offering $1 per share to take control of the company
- This is a 22 per cent premium to Stanmore’s latest closing price and a “compelling opportunity” for shareholders, according to Golden Investments
- After today’s offer, Stanmore shares are trading over 20 per cent higher at 99 cents each
Singapore-based Golden Investments is not giving up its fight to take over Stanmore Coal (SMR), with a fresh takeover bid launched today.
Golden Investments, which is currently Stanmore’s largest shareholder, has offered to cough up $1 for each Stanmore share on offer that Golden Investments does not already own.
The bid is unconditional and on-market. Golden Investments told Stanmore shareholders this is a “compelling opportunity” to get some real value out of Stanmore shares given the coal miner’s declining share price since its recent July 2019 peak.
However, this isn’t the first time Golden Investments has made a grab for Stanmore.
A persistent buyer
Golden Investments is a subsidiary of Golden Energy and Resources, a Singaporean explorer and seller of thermal coal.
In November 2018, the company made an unsolicited off-market offer to snatch up all Stanmore shares for 95 cents a pop. At the time, this was a 14.5 per cent premium to the company’s five-day volume-weighted average price.
Stanmore, however, rejected the offer. Eight months later, Stanmore shares would be worth $1.49 each, suggesting perhaps the rejection was the right move.
Nevertheless, Golden Investments was not ready to let go. The major shareholder called an Extraordinary General Meeting (EGM) for October 2019 to get Stanmore Chairman Stewart Butel and Managing Director Dan Clifford sacked. Golden Investments also wanted Cameron Vorias and Jimmy Lim appointed as Directors.
While Stanmore fought against the decisions, it seems Golden Investments got half of its wish anyway; Dan would resign soon after the EGM to take on the head role and fellow ASX-listed Aurelia Metals (AMI), and Jimmy was made a Director. Stewart remains Chairman.
Now, with Stanmore having finished some leadership shuffles, Golden Investments has launched its fresh bid to take control of the company.
Banking on coronavirus concerns
Golden Investments made two key arguments to Stanmore shareholders today. Firstly, the Stanmore share price has lost around half of its value since its July 2019 peak. Secondly, with COVID-19 terrorising economies around the globe, Golden Investment thinks the share price will sink even lower.
“This offer represents a compelling opportunity for you to realise immediate, certain, and attractive value for your Stanmore Coal shares in the face on an uncertain future,” Golden Investments said in its bidder’s statement.
The $1 offer is a 22 per cent premium to Stanmore’s last closing price and a 27.3 per cent premium to its 30-day volume-weighted average price.
Under the terms of the offer, Golden Investments, through its broker Petra Capital, will buy 50.3 million SMR shares before April 17, which is when the official offer period commences.
After April 17, Petra will then offer to buy up the remaining shares not already under Golden Investments control.
Stanmore still for now
Nevertheless, Stanmore has so far told shareholders to take no action regarding the latest Golden Investments bid.
The company said its Board will review the offer and provide a recommendation to shareholders in due course.
Of course, the Golden Investments offer has caused a quick surge in Stanmore shares today, which now sit just below the $1 offer price.
On the back of today’s takeover bid, Stanmore shares closed 20.73 per cent higher at 99 cents each.