Russian mining giant Nordgold alleges its takeover target Cardinal Resources has acted deceptively towards shareholders, with the matter escalated to the Takeovers Panel.
Russian mining giant Nordgold alleges its takeover target Cardinal Resources has acted deceptively towards shareholders, with the matter escalated to the Takeovers Panel.
It comes after Nordgold raised its bid for the Perth-based company on Wednesday to $1 per Cardinal share, matching an earlier proposal from Chinese bidder Shandong Gold.
Cardinal yesterday told shareholders they should take no action towards the latest offer from Nordgold, noting that Shandong could be in a position to raise its bid.
The Shanghai and Hong Kong-listed company had first offered to buy Cardinal in June for 60 cents per share, trumping Nordgold’s initial 46-cent bid in March.
Offers for Cardinal, whose flagship asset is the 5.1-million ounce Namdini gold project in Ghana, have more than doubled amid the fourth-month bidding war.
On October 19, Shandong lodged a second supplementary bidder’s statement stating that its offer of $1 per share was its “best and final” price, given the absence of a superior proposal at the time.
Cardinal yesterday said that, based on advice it had recently received from Shandong Gold, the increased offer from Nordgold could be a higher competing offer.
“If that interpretation is correct, Shandong Gold would be able to increase its offer if it chooses to do so,” Cardinal said.
The board has again recommended shareholders accept the latest $1 per share offer from Shandong Gold, and take no action towards the matched bid from Nordgold.
Nordgold, which holds nearly 28 per cent of Cardinal’s shares, has since escalated the matter to the Australian Takeovers Panel.
Its application detailed that Cardinal’s conduct was misleading or deceptive, and created uncertainty concerning the interpretation of Shandong’s last and final statement.
“In particular, it has implied that Shandong may be released from the legal consequences of its last and final statement,” Nordgold submitted.
The company also alleged:
- “A false market for Cardinal’s shares has been created as the market has traded, and continues to trade, on the basis of Cardinal’s misleading conduct”; and
- “The acquisition of control over Cardinal is not taking place in an efficient, competitive and informed market, and Cardinal’s shareholders have not been given enough information to enable them to assess the merits of the proposals.”
Nordgold has requested that Shandong Gold not depart from its last and final statement, among other orders.
A sitting panel has not been appointed and no decision has been made whether to conduct proceedings, the Takeovers Panel said.
It has not yet made a comment on the merits of the application.
