Perth-headquartered gold explorer Andean Resources Ltd today released its target's statement on the unsolicited takeover bid from Kingsgate Consolidated Ltd, blasting the all-scrip offer as inadequate and opportunistic.
Perth-headquartered gold explorer Andean Resources Ltd today released its target's statement on the unsolicited takeover bid from Kingsgate Consolidated Ltd, blasting the all-scrip offer as inadequate and opportunistic.
Perth-headquartered gold explorer Andean Resources Ltd today released its target's statement on the unsolicited takeover bid from Kingsgate Consolidated Ltd, blasting the all-scrip offer as inadequate and opportunistic.
As WA Business News reported earlier this month, Kingsgate made its takeover play for Andean on February 22 this year.
Under the terms of the offer, Kingsgate South America Pty Ltd, a wholly owned subsidiary of Kingsgate Consolidated Ltd, would acquire all of the issued capital in Andean Resources in a deal that would see Andean shareholders receive one Kingsgate share for every 15 Andean shares held.
Andean's principal asset is the Cerro Negro exploration project in Argentina.
At the time Andean advised shareholders to take no action on the off-market takeover until it had considered its position.
Today's statement clearly outlines Andean's intent regarding Kingsgate offer.
Andean's independent Directors have unanimously recommended shareholders reject the offer. They said the offer undervalued Andean and its highly prospective Cerro Negro project.
Andean believe the offer does not reflect an appropriate value for control of the company. It said that since the offer was announced Andean had consistently traded above the implied offer price.
The company also believed that the bid was opportunistically timed to deprive Andean shareholders of the future benefits of the Cerro Negro gold project.
Andean also see extra risk in the offer by exposing Andean shareholders to Kingsgate's future expansion plans, which by its own admission are dependent on the approval of nine new mining leases, and a requirement to sell down up to 51per cent of its Chatree gold mine in Thailand by November 2006.
Andean chairman Warren Gilmour said that directors consider the potential future development of Cerro Negro had the potential to deliver more value than that reflected in the current offer.
Recent drilling at the Cerro Negro project has uncovered more potential for a significant gold project, with a number of highly prospective gold prospects yet to be drilled by Andean within the property boundaries.
Kingsgate Consolidated is an Australian gold and silver exploration company. Its board believe that the acquisition of the Cerro Negro project would provide an excellent complement to Kingsgate's growing exploration and development portfolio.
The Kingsgate offer is conditional on obtaining 50 per cent share acceptance and Foreign Investment Review Board approval.