Nordgold ups Cardinal bid in takeover battle

Russian-owned Nordgold has made a new offer to buy Cardinal Resources, trumping a competing bid from Chinese company Shandong Gold by around $26 million.

Nordgold, which has previously made offers to buy West Perth-based Cardinal Resources for 0.46 cents and 0.66 cents per share in cash, has now upped its bid to 90 cents – representing a total consideration of around $420.5 million.

The offer represents a 29 per cent premium on Shandong Gold’s second offer of 70 cents, which has already been endorsed by the Cardinal board.

The news comes nearly two weeks after Shandong Gold received approval from the Australian government to proceed with its takeover, which values Cardinal at around $395 million.

The Shanghai and Hong-Kong-listed company has already satisfied Chinese regulatory approvals.

Cardinal, which believes the Shandong offer can be satisfied witihn a reasonable time frame, has told shareholders they should take no actions towards Nordgold's third offer, with Cardinal noting its obligations under a Bid Implementation Agreement signed with Shandong Gold.

Cardinal, whose flagship asset is the 5.1 million ounce Namdini gold project in Ghana, says it will provide a further update to shareholders “as soon as it is able”.

Hartleys, Canaccord Genuity, BMO Capital Markets and US-based Maxit Capital are acting as financial advisers to Cardinal while HopgoodGanim Lawyers and Canada-based Bennett Jones are acting as legal advisers.

The offer from Nordgold – which holds voting power of around 28.5 per cent in Cardinal – is scheduled to close on September 10.

Managing director Nikolai Zelenski reiterated the company had a strong West African business and remained committed to operating within the region.

He said the UK-headquartered company had the "project development expertise and robust balance sheet necessary" to bring Cardinal's Namdini project to production.

Cardinal shares soared 30 per cent on the news to trade at 92 cents, as at 3:10pm AEST.