JOHANNESBURG (miningweekly.com) – JSE-listed Omnia Holdings believes its C$0.20 a share all-cash offer to acquire Canadian firm Nordex Explosives still provides the highest value to Nordex shareholders.
This comes after Nordex on July 18 announced that another bidder, Société Anonyme d'Explosifs et de Produits Chimiques (EPC), had increased its offer for Nordex to C$0.18 a share, from a previous C$0.15 a share offer.
Omnia announced last week that it intended to make an offer to acquire Nordex through its BME subsidiary, although the Nordex board was not supportive of its offer.
Nordex on July 18 responded, telling its shareholders that there was no binding offer from BME and that BME was under no obligation to follow through on its intentions.
Nordex said that, after reviewing initial proposals from BME, its board was of the view that the proposed bid did not contain as much deal certainty as the offer from EPC.
Further, the board felt BME’s offer was “potentially catastrophic from a financial point of view if there were any impediments to closing” and that BME had left itself too many avenues to cleanly walk away at any time during the process.
“While the board obviously recognises that BME's per-share price offer was higher than that of EPC's, the board determined that there were too many risks and delays associated with the BME offer that it would not be in the best interests of the corporation to reject the EPC transaction in favour of BME.
“It should also be noted that BME has never made any binding proposals to Nordex during previous discussions, and that the price for Nordex's shares that BME previously proposed during such nonbinding discussions was significantly lower than the C$0.18 to which EPC ultimately legally agreed to pay,” Nordex said in a statement.
Nordex, therefore, reiterated its support for the EPC offer.
Omnia on Thursday said the Nordex board continued to want to sell Nordex for between C$0.12 and C$0.18 a share, ignoring Omnia’s higher offer.
It reiterated that it would mail its offer to Nordex shareholders by the end of this month and said the offer would be open for 35 days.
It further stated that its initial proposal to the Nordex board had been designed to provide it with much-needed bridge financing and additional working capital to support Nordex through to completion of a transaction.
Omnia said Nordex had failed to disclose its definitive agreements with EPC. “It is, therefore, impossible for a Nordex shareholder or Omnia to fully understand the terms and the conditions of the EPC transactions and to assess their conditionality in comparison to what the Omnia offer proposes. Nordex shareholders should look at this with skepticism and query why their board and management are withholding the full details of EPC transactions from them,” it said.
Omnia outlined the reasons why it believes its offer is superior to that of EPC, stating that the C$0.20 a share offer is a 22% premium to the value offered by EPC; that it would retain Nordex’s presence in Kirkland Lake, Ontario; that Nordex shareholders would have the opportunity to immediately realise a certain value for their shares; and that the offer provided Nordex shareholders greater liquidity.