Paladin Energy has announced the execution of a Bid Implementation Agreement under which Paladin will acquire all issued shares of Summit Resources that it does not presently own.
Paladin Energy makes the offer for Summit Resouces in line with its continued cost optimisation initiatives.
Paladin Energy already owns 82.08% of Summit and by purchasing the shares owned by third-party shareholders and delisting Summit, cost savings can be achieved in the areas of compliance and regulatory costs.
The company believes Summit’s third-party shareholders will benefit from accepting the offer in that they will exchange their Summit shares into shares in the company providing them ownership of a larger, more comprehensive and more liquid uranium entity.
Furthermore, Paladin Energy believes Summit on a standalone basis carries funding risk given its limited available cash and uncertainty as to how it may fund its operations going forward.
Under the offer, third-party Summit shareholders will receive one new Paladin share for every one Summit share held.
Based on Paladin’s closing share price of A$0.20 on the ASX on 31 July 2018, the offer values each Summit share at A$0.20.
The offer is unanimously recommended by the independent directors of Summit who have also agreed to accept Paladin’s offer in respect of all shares they control, in each case in the absence of a superior offer and subject to the independent expert not concluding that the offer is not fair and not reasonable.
Summit has engaged BDO Corporate Finance to prepare an independent expert’s report on whether the offer is fair and reasonable to shareholders.
The report will be provided to Summit shareholders with the Target’s Statement.