PERTH (miningweekly.com) – Suitor Aurora Funds Management has withdrawn its takeover bid for ASX-listed Molopo Energy, saying the company had made a number of transactions that are considered to be defeating conditions of the bid.
The transactions saw Molopo not only take full ownership of the Orient oil and gas project, in the US, but it also transferring ownership of the project over to Drawbridge Holdings in return for a 30% interest in that company.
Molopo obtained full ownership of the Orient project after redeeming its joint venture partner’s shares in Orient, and committing to funding the project in full to the tune of some $21-million.
Aurora said on Friday that each of these transactions alone, and combination with the others, triggered the defeating conditions clause, and in Aurora’s opinion, had substantially and adversely affected the value of Molopo’s assets.
Furthermore, following an application from Aurora, the Australian Takeovers Panel found that the actions of the former Molopo directors constituted ‘unacceptable circumstances’ in relation to Molopo’s affairs.
Molopo’s current board in August also expressed their confusion as to the reasoning behind the Orient/Drawbridge transaction, saying it resulted in the company’s cash reserves being depleted from A$66.2-million at the end of June last year, to just A$15-million at the end of June 2018.
The new directors also noted that the former Molopo directors had proceeded with the transactions without seeking shareholder approval, resulting in a breach of the ASX listing rules, as well as the company’s continuous disclosure obligations.
Aurora’s 18c-a-share takeover bid for Molopo will expire on August 20.