Cardinal board backs Shandong Gold offer
Cardinal Resources’ (ASX, TSX: CDV) board of directors is backing the improved off-market takeover proposal made last week by China’s second-largest gold producer Shandong Gold.
In a press release on Monday, Cardinal urged shareholders to vote in favor of Shandong Gold’s revised offer and reject the unconditional on‐market takeover offer previously made by Russia’s Nordgold.
Under the terms of the increased offer, Shandong Gold would acquire all Cardinal shares that it does not own at a cash price of A$0.70 per share, valuing the West Africa-focused gold miner at A$395 million. This represents a 6.1% premium to the Nordgold bid.
“While the board acknowledges that the Nordgold bid is unconditional, based on the information available at the date of this announcement, the board has no reason to believe that the conditions for the revised Shandong Gold offer, which include a 50.1% minimum acceptance condition and Foreign Investment Review Board approval, cannot be satisfied within a reasonable timeframe,” the company told shareholders.
“Cardinal understands that Shandong Gold has received all necessary Chinese regulatory approvals, with the result that the revised Shandong Gold offer is no longer conditional on any Chinese regulatory approvals.”
The board also noted that “there is the potential for certain shareholders to be aggrieved by the structure of the Nordgold bid” and it is possible that the bid could be subject to regulatory issues, particularly in Canada, which could prevent the deal from materializing.
Cardinal holds an interest in a number of tenements within Ghana. The company is currently focusing on the development of its Namindi project, which has an ore reserve of approximately 5.1 million ounces.