Russia’s Nordgold is not backing down in a takeover battle for Cardinal Resources, despite the Perth-based gold play in favour of a matching offer from Shandong Gold.
Russia’s Nordgold is not backing down in a takeover battle for Cardinal Resources, despite the Perth-based gold play in favour of a matching offer from Shandong Gold.
It comes as Nordgold made a second application to the Australian Takeovers Panel, alleging an announcement from Cardinal Resources on Friday was “materially misleading”.
Cardinal, which holds a market cap of $554 million, has received $1 per share ‘best and final’ cash offers from both Nordgold and China's Shandong.
The bidding war began in mid-June when Shandong offered to buy Cardinal for 60 cents per share, trumping Nordgold’s initial 46-cent bid from March.
Offers for Cardinal have since more than doubled, to $1 per share, with Nordgold last week matching Shandong's final offer.
Cardinal says nearly 23 per cent of its shareholders intend to accept the proposal from Shandong, which holds 11 per cent of Cardinal’s total shares.
By comparison, Nordgold controls nearly 28 per cent of Cardinal.
Nordgold, which has improved its offer to buy Cardinal three times within the past four months, has alleged its on-market takeover offer is more attractive than Shandong's off-market proposal, given that Cardinal shareholders would receive quicker payment.
The Russian miner also says that, unlilke Shandong, it has received change of ownership approval from the government of Ghana with respect to Cardinal's 5.1 million ounce Namdini gold project.
Further, Nordgold alleges that Shandong has benefited from matching rights provided by Cardinal, along with other deal protections, including a break fee.
“Nordgold has had no such protections and its offer has been free of any conditions for three months,” the company said today.
"Shandong elected to declare its offer best and final on October 19 2020 in order to encourage shareholders to accept its offer shortly before the closing date of the offer.
"In contract, Nordgold has not sought to put shareholders under time pressure to make decisions, having made a number of extensions, all with appropriate notice ahead of scheduled closing dates."
Nordgold, which also operates in West Africa, has extended its offer period until November 6.
The company has submitted two applications to the Australian Takeovers Panel, alleging misleading and deceptive conduct by Cardinal with regards to announcements made last week.
Nordgold is due to provide further information on its second application.
