High Peak Royalties Ltd (ASX:HPR) has strengthened its balance sheet to the tune of almost $1.313 million after deciding to accept an offer to acquire its holding of approximately 10% in Royalco Resources Limited (ASX:RCO).
This offer for HPR’s holding of more than 5.47 million shares at 24 cents per share is in relation to a takeover of Royalco by Fitzroy River Corp Ltd (ASX:FZR).
Profit on original cost
The $1,312,908 in cash receipts from the sale represents an accounting profit of approximately $240,000 on the original cost of HPR’s acquisition of Royalco shares and there no brokerage fees or stamp duty on the sale of these securities.
HPR continues to actively seek and evaluate investment opportunities and said that an increased cash balance may assist in funding acquisitions.
Fitzroy’s offer price is a 20% premium to the one-month and three-month VWAP of Royalco shares on the announcement date.
Offers values target at $12.65 million
On November 14. 2019, Fitzroy announced it would make an off-market takeover offer for Royalco, which valued the latter at approximately $12.65 million.
At that time Fitzroy held 47.76% of Royalco and the offer price valued the remaining shares not held at approximately $6.61 million.
Fitzroy lodged a Bidder’s Statement on November 21 that put HPR’s interest in Royalco at 10.68%.
As of December 17, Fitzroy’s interest in Royalco had been increased to 48.16% but HPR’s subsequent decision will lift this.