Azumah Resources Limited (ASX:AZM) Board of Directors has unanimously recommended that shareholders accept an increased takeover offer of 3.3 cents from IGIC Pte Ltd, an affiliate of Ibaera Capital Fund GP Limited.
In making the recommendation, directors state that the increased offer represents a compelling premium of 136% to the closing price of Azumah shares prior to the announcement of the offer.
18% premium to initial offer
It also represents an 18% premium to the initial offer made by Ibaera of 2.8 cents per Azumah share.
Azumah chairman Michael Atkins said, “The increased offer is a good result for shareholders, given the significant premium offered to the Azumah share price immediately prior to the offer being announced.”
He said it was also a premium to the implied value per Azumah share represented by the recent minority 4% interest earn-in transaction entered into with Ibaera in respect to the Wa Gold Project.
“The increased offer price and consequent premium paid to Azumah shareholders is one we believe to be a fair recognition of both Azumah and Ibaera’s respective control over the development of the Wa Gold Project through the existing joint venture arrangements, particularly where key decisions over future progress require the unanimous agreement of both parties,” Atkins said.
“We recognise that some shareholders may have preferred to realise the ultimate vision of successfully bringing the Wa Gold Project into production.
“However, after balancing the increased price now on offer for Azumah shares against the inherent future risks of successfully completing financing, construction and entering into steady-state production, as a Board we unanimously believe that accepting the increased offer is the best path forward for shareholders.”
Azumah shares are up 10% today to 3.3 cents.
December 3 closing date
The increased offer is now scheduled to close at 7.00pm (Sydney time) on December 3, 2019, unless extended.
Ibaera has also agreed to shorten the payment terms to 10 business days after acceptance of the increased offer.
In a statement, Azumah said: “Each of the Azumah directors who hold or control Azumah shares intend to accept the increased offer in relation to those shares in the absence of a superior proposal.”
Azumah shareholders who may have previously accepted the offer are also entitled to receive the increased offer consideration of 3.3 cents per share.
In connection with the increased offer, Azumah has agreed to:
- In the event that Ibaera acquires a relevant interest in at least 30% of Azumah’s shares, appoint a nominee of Ibaera to the Azumah Board, at which point one of the existing non-executive directors of Azumah will resign from the Board;
- In the event that Ibaera acquires a relevant interest in at least 40% of Azumah’s shares, appoint an additional independent non-executive director, nominated by Ibaera but independent of Ibaera, to the Azumah Board; and
- In the event that Ibaera acquires a relevant interest in at least 50% of Azumah’s shares, appoint an additional nominee of Ibaera to the Azumah Board (which will provide Ibaera with a total of two nominees on the Azumah Board), at which point Azumah’s existing managing director will be made redundant and will retire from the Azumah Board.
Ibaera has also agreed to pay an amount, calculated based on a Black-Scholes pricing model, for the Azumah options on issue in consideration of those options (at Ibaera’s election) either being cancelled or exercised and accepted into the increased offer.
All of the Azumah directors have agreed to accept any such offer made in respect to those options.
Azure Capital is acting as financial advisor and Corrs Chambers Westgarth as legal advisor to Azumah.