Elemental Minerals receives binding $190M cash takeover offer
Dingyi Investment’s binding $0.66 cash per share takeover offer represents a significant premium over Elemental Minerals’ current share price of $0.45 and has been judged to be both fair and reasonable by an independent expert.
The off-market offer represents
a 126% premium to the volume weighted average price of its
shares over the 20 trading days prior to the original offer made on 12 April
It is also a 52% premium to the 20 day VWAP to 28 June 2013.
Elemental noted that the majority of its directors had recommended that shareholders accept Dingyi’s offer and that independent expert BDO corporate finance had confirmed the offer was fair and reasonable in the absence of a superior offer.
Non-executive chairman Sam Middlemas, John Ian Stalker, Michael Barton and Robert Franklyn have all recommended the offer while chief executive officer Iain Macpherson has recommended that shareholders reject the offer on its current terms though he reserves the right to reconsider.
Stalker and his related entity Fiducs Limited as well as Elemental’s largest shareholder Pala Investments have entered into pre-bid purchase agreements with Dingyi over their combined interest of about 13.6% in Elemental.
In addition, Dingyi has agreed to subscribe for $5 million of Elemental shares at an issue price of $0.3407 each and provide Elemental with additional financing of up to $15 million through a secured convertible loan facility to provide working capital.
The offer is subject to pre-conditions including a 50.1% acceptance condition and Dingyi’s shareholders approving the transaction though its chairman Li Kwong Yuk has already undertaken to vote his 50.3% stake in favour of the deal.
Dingyi’s binding offer of $0.66 cash per share is particularly significant given that it offers a significant premium over Elemental’s current and past share prices in a difficult market. The cash offer is also something of a rarity and attractive to Elemental holders.
It also highlights the value of the company’s assets including the Sintoukola Potash Project in the Republic of Congo.
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