Photo by: Bloombeg
PERTH (miningweekly.com) – Potash hopeful Elemental Minerals on Friday announced that it had received an unsolicited, nonbinding, incomplete and conditional expression of interest from Dingyi Group Investment regarding a possible off-market takeover.
Under the expression of interest, Dingyi was offering Elemental shareholders 30c a share in cash for their stake in the ASX-listed junior.
This is the second time that Dingyi has made a play for Elemental, after the previous off-market bid in 2013/14 lapsed after the Hong Kong Stock Exchange determined the bid to be a reverse takeover, and that Elemental did not meet the listing requirements for mineral assets under its listing rules.
Elemental said on Friday that Dingyi had not provided the company with sufficient certainty that the issues raised by the Hong Kong Stock Exchange were no longer applicable.
Furthermore, the company said that there was no guarantee that the proposal from Dingyi would be completed, adding that the consideration offered under the expression of interest was significantly below both the fundamental value of the company and the value that could be created from a transaction with Summit Private Equity.
In January this year, Elemental signed a nonbinding term sheet and entered into an exclusivity agreement with Summit over a proposed $50-million equity investment.
Under the Summit agreement, Summit would subscribe for shares in Elemental, at a price of 20c each, allowing the ASX-listed junior to accelerate the development of its various potash projects, including the Kola mine, in the Republic of Congo.
Elemental said on Friday that its negotiations with Summit were progressing well, and the board was hoping to update shareholders on the proposed transaction in the near future.