PERTH (miningweekly.com) – ASX-listed Metalicity has urged the shareholders of takeover target Nex Metals to accept a takeover offer for that company, amid declarations by the Australian Takeovers Panel of "material deficiencies" in Nex Metals’ target statement.
The Takeovers Panel this week ordered Nex Metals to prepare a replacement target statement in a form that the Australian Securities and Investment Commission would not object to and to have an independent expert provide an opinion on Metalicity’s bid.
The Takeovers Panel also found that Nex Metals could not proceed with a rights issue, without gaining shareholder approval.
Metalicity’s offer to Nex Metals shareholders is 4.81 Metalicity ordinary shares for every Nex Metals share on issue, valuing Nex Metals equity at A$12.8-million based on Metalicity’s closing share price on September 13.
Under Metalicity’s offer, Nex Metals shareholders would own 37.5% of the enlarged entity that would hold a 100% interest in the Kookynie and Yundamindra gold projects, with improved access to capital, and an enhanced balance sheet position.
Nex Metals has previously urged shareholders to reject the takeover offer, claiming a "lack of information" from Metalicity, and separately lodged a writ in the Supreme Court of Western Australia against Metalicity and its subsidiary Kym Mining, questioning Kym’s Stage 1 expenditure into a 2019 farm-in agreement over the Kookynie and Yundamindra gold projects.
Metalicity has reportedly earned a 51% controlling interest in the Kookynie and Yundamindra gold projects after successfully completing a A$5-million exploration programme, and the projects are now under the direct operational control of Metalicity.
“Over the last few weeks, it has become increasingly obvious that, as we originally thought when we launched our bid, Nex Metals does not have either the management capability or the technical and financial capacity to actively support the development of their current 49% interest in the Kookynie and Yundamindra gold projects,” said Metalicity chairperson Andrew Daley.
“In response to our offer, all we’ve seen is a few haphazard and spurious legal claims. They have not even been able to produce a proper target’s statement, as they were required to do by October 29. They will now be forced to appoint an independent expert to provide Nex Metals shareholders with a proper view of the value of our offer.
“In addition, they have also challenged our 51% controlling interest in the Kookynie and Yundamindra gold projects. This after previously acknowledging publicly our completed earn-in and being represented at the first meeting of the joint venture management committee.”
Daley said that rather than issuing a valid, well-reasoned target statement with all the necessary information to allow shareholders to make a considered decision on the Metalicity offer, Nex Metals had instead attempted to "frustrate" the offer process by making "haphazard" legal claims and delaying publication of the company’s up-to-date financial accounts.
“Surely it must be clear by now that the only logical way forward that will allow the Kookynie and Yundamindra gold projects to realise their potential is under one focused and qualified management team that can actually progress the project,” Daley said.
Metalicity’s offer for Nex Metals is set to close on December 15, unless withdrawn or extended.