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Bullabulling Gold repeats rejection of Norton Gold's takeover approach


Bullabulling Gold (ASX: BAB, LON: BGL) has repeated its rejection of Norton Gold Fields' takeover approach after an independent expert said the offer was neither fair nor reasonable.

Norton Gold has offered 7c (3.92p) per share, but BDO Corporate Finance, which is acting independently, said its estimate of Bullabulling’s value is between 11c and 16.1c.

Its preferred value is 14.6c (8.2p) or more than twice the offer price.

In its formal response document to Norton’s offer, Bullabulling quotes BDO’s assessment that: “in the absence of a superior offer, the offer is neither fair nor reasonable to shareholders".

Bullabulling is currently preparing a definitive feasibility study (DFS) for its flagship project in Western Australia, which is expected to be ready early in 2015.

BDO said that the current market price of Bullabulling does not reflect any impact of the announcement of the findings of a completed DFS.

“If the findings of the DFS are favourable and demonstrate economic viability of an initial gold reserve, then it may be expected that the value of the Bullabulling Gold Project, and therefore the trading price of Bullabulling shares will increase.”

Bullabulling’s board added that the offer is opportunistic and timed to capture value that will otherwise flow to shareholders in the medium and long term.

Norton Gold is listed on the Australia exchange (ASX:NGF) and is 82.43% owned by Chinese giant Zijin Mining.

The response statement also rebutted Norton’s claim that Bullabulling faced "significant funding challenges".

Some additional funding will be required in the near term to complete the DFS, it said, adding that assessment of funding options was well under way when the Norton bid was lodged.

"The board is continuing to assess appropriate funding alternatives.

Directors have had preliminary discussions with a number of financiers in relation to the funding that will be required to develop the Bullabulling Gold Project. The company does not intend to materially advance these discussions until the DFS has been completed."

As at March 31, Bullabulling's cash and deposits totalled approximately $3.05 mln.

Meanwhile, Norton has submitted to the Australian Takeovers Panel that Bullabulling sent a letter to shareholders on April 24 this year about the bid, which left out material information and contains certain statements, which have the potential to mislead shareholders, including:

- that 41.8% of shareholders have informed Bullabulling they did not intend to accept it.

- that Norton may make a future, follow-on offer if it did not acquire 100% of Bullabulling.

- shareholders' ability to accept and benefit from any future, follow-on offer by Norton.

- Bullabulling's near term developments over the next 9-12 months.

Norton wants Bullabulling to send a new letter, approved by the panel, correcting or clarifying these deficiencies.

Bullabulling shares in London are unmoved today at 4 pence each.


Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

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