Cardinal Resources advises its shareholders to accept the increased takeover offer tabled by Shandong Gold in the absence of a superior proposal.
Shandong Gold increased its takeover offer for West African gold explorer Cardinal Resources to A$1.00 a share, up from its previous offer of $0.70 a share on 7 September.
The Cardinal board, together with the Special Committee and its financial and legal advisers, carefully considered the improved Shandong offer in detail and given the superior price to the Nordgold takeover bid, the Cardinal board unanimously recommends that its shareholders accept the improved Shandong offer (in the absence of a superior proposal) and reject the Nordgold takeover bid.
Cardinal directors who own or control shares in Cardinal intend to accept the improved Shandong offer in respect of all of the shares they own or control on Monday, 14 September 2020, subject to there being no superior proposal.
The recommended improved Shandong offer of $1.00 cash per share values Cardinal at approximately $565.6 million on a fully diluted basis and represents an attractive premium of approximately 11.1% to the revised Nordgold takeover bid of A$0.90 cash per share.
The bidding war for Cardinal Resources began in mid-March when Nordgold tabled an unconditional, on-market offer to acquire all un-owned Cardinal shares for $0.45 a share. This offer was challenged by Shandong in June, when it tabled a conditional off-market takeover offer of $0.60 a share — a 31% premium on Nordgold’s offer.
In mid-July, Nordgold upped its initial offer to $0.66 cents per share, which a week later saw Shandong up its offer to $0.70 a share.
On 2 September, Nordgold once again tabled a competing offer of $0.90 a share. Cardinal shareholders were advised to take no action on this offer given Shandong’s matching rights, which afforded Shandong the opportunity to provide a matching or superior proposal to the revised Nordgold on‐market takeover offer.
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Cardinal received Shandong’s counter offer on 7 September of $1.00 per share.
While Shandong’s latest offer is no longer subject to Chinese Regulatory Approvals or FIRB Approval, which had already been granted, it remains subject to a number of conditions, including the minimum acceptance condition of 50.1%, which was set out in the Bid Implementation Agreement entered into by Cardinal and Shandong in June.
The Cardinal board says that it has no reason to believe that the remaining conditions of the improved Shandong offer cannot be satisfied within a reasonable time frame based on the information available to it and in careful consultation with Cardinal’s advisers.