PERTH (miningweekly.com) - Junior Central Australian Phosphate has told shareholders to hold off on taking any action regarding an unsolicited off-market takeover offer by fellow-listed Rum Jungle Resources.
Rum Jungle on Wednesday offered one of its own shares, along with 20c in cash, for every 20 Central Australian Phosphate shares held, valuing the takeover target at around A$12.7-million.
The offer represented a 43.3% premium to the closing price of Central Australian Phosphate’s shares on February 12, and a 34.4% premium to a recent rights issue.
Rum Jungle chairperson Robert Annells said that the offer provided Central Australian Phosphate shareholders with an attractive value proposition.
“With Rum Jungle Resources’ strong growth platform, the board believes the acquisition of Central Australian Phosphate is a compelling next step in unlocking the value of our complementary Barrow Creek and Arganara assets.”
MD David Muller added that the combined company would be better placed to increase the exploration expenditure at Arganara and attract and retain skills.
“I believe the combination of Rum Jungle and Central Australian Phosphate is very compelling and will deliver value to Central Australian Phosphate shareholders more rapidly than, and significantly beyond that achievable by Central Australian Phosphate on a standalone basis.”
The offer was conditional upon a 50% minimum acceptance condition.
The takeover target said on Wednesday that it would now review the offer documents, and would advise shareholders in due course.