Panel rejects Westgold application

The Takeovers Panel has rejected an application submitted by Westgold Resources in relation to its hostile takeover offer for fellow Western Australian goldminer Gascoyne Resources.

Westgold’s all-scrip takeover of Gascoyne would be worth about $120 million but the target’s board is in favour of a separate merger deal with explorer Firefly Resources – with a scheme meeting scheduled for October 27.

Westgold, which has operations in the Mid West, has repeatedly stated that its takeover offer represented a superior proposal to Gascoyne’s shareholders.

The bidder reiterated those claims in a submission to the Takeovers Panel, arguing that the scheme implementation deed with Firefly operated as an “unacceptable lock-up device”, in that Gascoyne was unable to accept a superior proposal.

Westgold sought interim orders from the panel, including that the scheme meeting with Firefly be postponed and that the merger agreement be amended to include a termination right for Gascoyne.

But the Takeovers Panel has declined to conduct court proceedings, having said there was no reasonable prospect that it would make a declaration of unacceptable circumstances, given the Gascoyne board had determined the offer from Westgold was not superior to the Firefly merger.

Gascoyne’s shares were unchanged at Friday’s close, trading at 39 cents.

Westgold closed down 0.3 per cent to trade at $1.95 per share.