Cardinal Resources Ltd’s (ASX:CDV) (TSE:CDV) (OTCMKTS:CRDNF) board of directors has unanimously recommended that shareholders accept the revised A$0.70 off-market takeover offer from Shandong Gold Mining (Hong Kong) Co Limited.
Shandong Gold’s revised offer values Cardinal at approximately A$395 million on a fully diluted basis.
It also represents a premium of approximately 6.1% to the Nord Gold S.E. bid of A$0.66 cash per share announced on July 15, 2020.
"Reject" Nordgold offer
In a Target’s Statement in relation to Nordgold’s unconditional on-market takeover offer, Cardinal has recommended that this be rejected.
These recommendations follow careful consideration of these offers by the board of directors in consultation with the company’s Special Committee, its financial and legal advisors.
The board considered the Nordgold bid closely and in the context of the revised Shandong Gold offer and took into account, amongst other matters, the price and conditionality of the two offers.
While acknowledging that Nordgold’s bid is unconditional, based on information currently available Cardinal’s board states it has no reason to believe the conditions of the revised Shandong offer cannot be satisfied within a reasonable timeframe.
These include, amongst other conditions, 50.1% minimum acceptance by Cardinal shareholders and Foreign Investment Review Board (FIRB) approval.
Cardinal understands that Shandong Gold has received all necessary Chinese regulatory approvals, with the result that the revised offer is no longer conditional on any Chinese regulatory approvals.
In a statement, Cardinal said: “The board also notes that there is the potential for certain shareholders to be aggrieved by the structure of the Nordgold bid (namely those shareholders holding Cardinal shares in non-Australian depositaries or on branch registers).
“While the Nordgold Bidder’s Statement alludes to a practical mechanism whereby such Cardinal shares can be moved to an Issuer Sponsored Holding or CHESS Holding in Australia in order to accept the Nordgold bid, it is possible that the Nordgold bid could be subject to regulatory issues (particularly in Canada) which could result in it being prevented from proceeding in the absence of corrective steps taken by Nordgold.”
In line with the acceptance recommendation, the Bid Implementation Agreement requires Cardinal and Shandong Gold to use best endeavours to agree any amendments which are reasonably necessary or desirable to reflect the revised and improved Shandong Gold offer.
Cardinal anticipates entering into an appropriate amending agreement to give effect to such amendments imminently.
Details regarding the revised Shandong Gold offer will be set out in the Bidder’s Statement and Target’s Statement, which are expected to be dispatched to shareholders in early August.
Cardinal’s joint financial advisers are Maxit Capital LP, BMO Capital Markets, Hartleys Limited and Canaccord Genuity Corp and its legal advisers are HopgoodGanim Lawyers (Australia) and Bennett Jones LLP (Canada).