JOHANNESBURG (miningweekly.com) – Shareholders of Canadian firm Nordex Explosives have one month to accept a now-formal fully funded, all-cash inflated takeover bid by JSE-listed Omnia Group.
Omnia this week, through its mining division BME, raised the stakes with an offer of C$0.22 per Nordex share, taking the deal to shareholders after facing resistance from the Nordex board.
This is an increase from the C$0.20 a share all-cash offer that overshadowed rival bidder Société Anonyme d'Explosifs et de Produits Chimiques’ (EPC’s) increased C$0.18 apiece offer – from a previous C$0.15 a share offer – which Omnia claim the Nordex board is more in favour of.
Nordex in July told its shareholders that there was no binding offer from BME, meaning BME was “under no obligation” to follow through on its intentions, and that the proposed bid did not contain as much deal certainty as the offer from EPC.
“Omnia sees Nordex as the ideal base to grow its North American business, and has the financial means and capacity to ensure that the facility continues to provide jobs to the surrounding community for years to come and to make the necessary technical investment to improve the business,” Omnia said in a statement on Thursday.
Its formal offer will expire on September 9.
The new offer “removes the opportunity” for EPC to significantly dilute current Nordex shareholders and “put shareholders at risk”, particularly as the proposed change of control private placement to EPC is highly dilutive, said Omnia, urging shareholders to reject the EPC bid at a shareholder meeting scheduled for August 18.
“EPC's subscription, at a subscription price of C$0.12, through which it will come to own 67% of the Nordex shares, is opportunistic, undervalues Nordex and represents a 45% discount to the share price set out in the BME offer,” it said.
Omnia reiterated the value its deal offered, namely the retention of Nordex’s presence in Kirkland Lake, Ontario; that Nordex shareholders would have the opportunity to immediately realise a certain value for their shares; and that the offer provided Nordex shareholders greater liquidity.