ASX-listed Middle Island Resources (MDI) has extended the offer period for its off-market takeover offer to acquire 100% of fellow-listed Alto Metals to August 2.
MDI first announced its intention to acquire all the Alto shares that it did not own on April 10.
The offer period extension followed MDI warning in May that a defeating condition had been triggered for its takeover offer of Alto, after Alto announced a capital raise earlier in that month.
Alto had previously said that it would raise A$600 000 through a share placement to Alto chairperson Terry Wheeler, as part of a larger A$2.6-million capital raise, allowing Wheeler to maintain his interest in the company.
The issue of 16.7-million shares and 8.3-million options to Wheeler was subject to shareholder approval.
However, MDI then said that the issue of the additional securities to Wheeler would trigger a defeating condition of its A$9.4-million share bid for Alto, under which MDI was offering five of its own shares for every one Alto share held.
MDI had not waived the breach of the defeating condition, reserving its right to rely on the trigger to allow the offer to lapse, or to apply to the Australian Securities and Investment Commission for consent to withdraw the offer.
Alto had previously urged shareholders to reject the takeover offer from MDI, with the company’s major shareholders, who hold a combined 25.37%-interest in Alto, saying they would not accept the offer.
Alto told shareholders that the takeover offer failed to recognise the company’s unrealised potential, and offered little benefit to Alto’s shareholders.
Alto had also stated its belief that the takeover offer from MDI would only be the first attempt by this company to gain control of Alto, citing its reduction in the minimum acceptance from 90% to 50.1%.