Cardinal beckons third party bidder amid takeover stalemate

Image courtesy of Nordgold.

Cardinal Resources (ASX, TSX: CDV) released a statement on Wednesday expressing its disappointment with the Australian Takeovers Panel’s decision not to intervene in the takeover battle between Shandong Gold and Nordgold, which has hit an impasse due to the conundrum surrounding statements made by the bidders.

Earlier this week, the panel declined to proceed with intervention requests made by all of the parties, saying there was no reasonable prospect that the current situation between Shandong and Nordgold qualified as “unacceptable.”

Cardinal’s Namdini project in Ghana is estimated to produce 4.2 million ounces of gold over a mine life of 15 years

It also said that Shandong’s qualification in its “last and final” statement was not ambiguous, and that Nordgold’s matching of the Shandong offer and seeking to hold the Chinese bidder to its last and final statement was not a misuse of the “truth in takeovers” policy.

A Nordgold spokesperson previously acknowledged that both Nordgold and Shandong’s bid of A$1 per Cardinal share was now “best and final”, but argued that Nordgold remained the better option for Cardinal’s West African project, given its track record in the region.

As for Cardinal, the takeover target said it would consider its options in relation to the panel’s decision and “explore all possible contingencies.”

With regards to the current offers on the table, Cardinal noted that an opportunity exists for a third party bidder (or a consortium of bidders) to make a competing offer at a higher price than A$1 per share.

This would effectively free up Shandong and Nordgold of their respective “best and final” statements and enable both to increase their offers.

Cardinal is currently developing the Namdini project in Ghana, where a previous feasibility study estimated that it would produce 4.2 million ounces of gold over a mine life of 15 years, with an estimated 1.1 million ounces expected over the first three years of operation.

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