PERTH (miningweekly.com) – The Australian Takeovers Panel has been left to muddle through the Cardinal Resources tussle, having now been approached by all the invested parties.
Takeover target Cardinal Resources on Friday submitted an application to the Takeovers Panel to allow both suitors, Shandong Gold Mining and Nordgold, to improve their respective A$1 a share offer, as both companies had issued last and final statements.
A stalemate was reached last week after Nordgold upped its own 90c a share offer to match the A$1 a share offer from Shandong, after the Chinese firm had issued its last and final statement saying it would only increase its offer price if its A$1 a share bid was exceeded.
With Nordgold matching the Shandong offer, it effectively prevented the Chinese suitor from increasing its own offer price.
Nordgold previously turned to the Takeovers Panel to seek orders reaffirming that Shandong would be unable to increase its offer price, unless a bid higher than A$1 a share was made.
Cardinal Resources has now also approached the Takeovers Panel, asking that both suitors be allowed to increase their offer price, given that Cardinal’s shares have been consistently trading above the A$1 a share benchmark set, and since it appeared that "no shareholders have accepted either bid as a result of the last and final statements".
Cardinal argued that by allowing both parties leave to raise their offer price, the current stalemate between the bidders would be freed.
Meanwhile, Shandong Gold Mining on Monday also filed an application with the Takeovers Panel, with the company trying to nul shareholder MM Asset Management's (MMAM’s) earlier acceptance of Nordgold’s 90c a share offer, and requesting its release from its best and final statement, allowing the company to raise its offer price for Cardinal.
Shandong pointed out that MMAM had sold off more than 48.5-million shares in Cardinal through a series of on-market transactions on the day Cardinal initially increased its offer price from 66c a share to 90c a share, effectively giving Nordgold an 8.55% interest in the takeover target.
Shandong argued that MMAM’s actions were not economically rational when taking into account that there were good prospects of the competitive bidding process continuing, and that a material volume of the accepted shares could have been sold on market at a price higher than 90c a share, at a date after Nordgold’s first increased offer.
The Chinese suitor also noted that subsequent to its share sale to Nordgold, MMAM purchased a further 3.17-million shares in Cardinal, at a price of 91c each, indicating that the company believed there was value in Cardinal shares above 90c each.
Shandong claims that Nordgold had acquired a relevant interest in the MMAM stake prior to that shareholder accepting into the Nordgold offer, resulting in Nordgold’s voting power in Cardinal exceeding 20%, and that its own best and final statement was made in circumstances where there was not an "efficient, competitive and informed" market, preventing Shandong from making a competing bid for the MMAM stake.
Shandong is seeking orders from the Takeovers Panel that MMAM’s acceptance of the Nordgold offer be unwound, and that the company be released from its best and final statement to allow for an increased offer price.