Westgold Resources has improved its all-scrip offer for fellow Western Australian goldminer Gascoyne Resources, following a rejected application to the Takeovers Panel.
Westgold Resources has improved its all-scrip offer for fellow Western Australian goldminer Gascoyne Resources, following a rejected application to the Takeovers Panel.
Perth-based Westgold is now offering three of its shares for every 11 shares held in Gascoyne, valuing the target at 53 cents per share, or about $134 million.
The revised bid applies once Westgold receives at least a 50.1 per cent interest in Gascoyne’s shares.
Westgold claims the new offer is a significant increase in value to its existing one-for-four bid and provides an enhanced premium for Gascoyne’s shareholders, who are due to vote on a separate merger with Subiaco-based Firefly Resources on October 27.
Westgold’s bidder’s statement submitted earlier this month will be sent to Gascoyne’s shareholders on October 29, with the offer scheduled to close on November 29.
Gascoyne said the board was reviewing the new offer but has recommended shareholders take no action until further announcement.
Earlier this month, Westgold sought interim orders from the Takeovers Panel, including that the scheme implementation deed with Firefly be amended to include a termination right to Gascoyne and that the scheme meeting be postponed so the target’s shareholders can consider the takeover offer.
The panel declined to conduct court proceedings since Gascoyne’s board had determined the takeover offer was not superior to the deal with Firefly.
But Westgold claims its offer is superior to the “highly dilutive” merger with Firefly.
“Westgold is offering Gascoyne’s loyal shareholders a tangible and immediate growth path to value creation, as opposed to what Westgold considers to be the value destructive merger with Firefly, with all its associated risks,” executive director Wayne Bramwell said.
“Unlike Gascoyne, Westgold can afford to be patient but it’s now time for the Gascoyne board to put its shareholders’ interests first and reconsider our offer, and if it still so determines definitively state why our bid is not a superior proposal.”
He said Gascoyne’s Dalgaranga operation in the Mid West was just one infrastructure option for Westgold to expand.
Conversely, Gascoyne is seeking to incorporate Firefly’s Yalgoo project into the Dalgaranga plan, where mining is expected to wind up in early 2025.
Gascoyne’s shares closed up 10.3 per cent on Monday to trade at 43 cents.
Westgold closed up 3.6 per cent to trade at $2.02.
