PERTH (miningweekly.com) –Takeover target Universal Coal has urged shareholders to reject an unsolicited bid from ASX-listed TerraCom, after an independent expert determined that the offer was neither fair, nor reasonable.
TerraCom’s 33.5c-a-share offer for Universal consists of 10c in cash and 0.6026 new TerraCom shares for each Universal share held.
However, Universal told shareholders on Tuesday that the consideration payable significantly undervalued the company, while the structure of the bid increased the risk profile for non-associated shareholders.
Furthermore, Universal also raised concerns around how the cash component of the bid would be funded.
The company has again urged shareholders to reject the unsolicited bid.
TerraCom earlier this week noted that acceptances received to date, when aggregated with the company’s existing shareholding in Universal, gave TerraCom the right to exercise some 59% of the voting rights attached to Universal shares.
“We are delighted with the level of acceptances under the offer and would like to welcome new retail and institutional investors to the TerraCom register,” said TerraCom deputy chairperson Craig Ransley.
“The challenging times we are facing have further cemented TerraCom’s belief that the transaction is in the best interest of TerraCom and Universal shareholders. Similarly we should hope that recent world events would guide the Universal team to focus on reason, directing Universal shareholder funds to a stronger whole, positioned to ride the market storm not advisory fees and personal surety.”