Metalicity has sought to consolidate ownership of two gold projects in Western Australia after launching a hostile takeover bid for joint venture partner Nex Metals.
Metalicity has sought to consolidate ownership of two gold projects in Western Australia after launching a hostile takeover bid for joint venture partner Nex Metals Explorations.
Perth Airport-based Metalicity submitted its off-market takeover proposal today, having offered 4.81 of its shares for every share in Nex Metals that it doesn't already own, valuing the business at $12.8 million.
The offer is a 30 per cent premium to Nex's last traded price on September 13.
If approved by shareholders, Tom Percy-chaired Nex will retain a 37.5 per cent stake in the combined group which will have an entire interest in the Kookynie and Yundamindra gold projects.
Nex this afternoon said it would evaluate and assess the terms of the proposal, but advised shareholders they should take no action in relation to the offer until further announcement.
Metalicity currently holds a 51 per cent interest in the Kookynie and Yundamindra projects, having completed a $5 million exploration program.
Chairman Andrew Daley said the merged business would have an improved access to capital, reduced costs, and greater operational efficiencies.
“The combination of Metalicity and Nex Metals makes logical sense,” Mr Daley said.
“The primary asset of both companies is the highly attractive Kookynie and Yundamindra Gold projects.
“Rationalising the ownership of the projects into a single listed entity creates a number of compelling benefits for both groups of shareholders, and allows us to better realise and maximise the value of the projects for all shareholders.”
He said Metalicity and Nex had been in discussions about a potential merger for more than a year.
“We have presented a compelling proposal to the board of NME on multiple occasions and believed this offer should be placed in front of their shareholders,” Mr Daley added.
“We continue to have a close working relationship with NME via the JV and we look forward to the fast and amicable completion of this transaction for the benefit of all shareholders.”
He said Nex shareholders would retain exposure to the potential upside of Kookynie and Yundamindra through the all-scrip offer.
The deal is subject to a number of conditions, including a 90 per cent minimum acceptance of the offer.
Nex closed up 16.2 per cent on the ASX to trade at 4.3 cents a share.
Metalicity shares remain unchanged, trading at 1 cent.
Canaccord Genuity and Melbourne-based Harbury are acting as financial advisers to Metalicity in relation to the offer and Steinepreis Paganin as legal adviser.
