Perth gold explorer Carrick Gold Ltd has made a $23 million cash-and-scrip takeover offer for fellow Frank Carr-chaired gold explorer Shannon Resources Ltd.
Perth gold explorer Carrick Gold Ltd has made a $23 million cash-and-scrip takeover offer for fellow Frank Carr-chaired gold explorer Shannon Resources Ltd.
Shanon listed on the ASX last year after raising $2.6 million in its initial public offering, which was pitched at 20 cents per share.
Its stock is currently trading at about 55 cents per share, after rocketing as high as 90 cents last year.
The offer values Shannon at $23 million and will deliver a big gain to Mr Carr, who is Shannon's largest shareholder with a 38 per cent stake and the chairman of both companies.
Shannon shareholders will receive 10 cents for each fully paid share and one Carrick share for every two shares held. Carrick will also issue one share for every two 20 cent Shannon options held.
A Carrick announcement said the takeover was a mutual decision, born from their realisation that the proximity of their tenements made joint development the most profitable option, saving money in drill programme planning, administration and extraction.
The company said the respective locations of their tenements would also lend themselves to the establishment of a joint and centrally-located processing facility.
In an announcement to the ASX, Mr Carr said he would accept the Carrick offer in the absence of a higher bid from another party.
The full text of a company announcement is pasted below
Carrick Gold Limited (CRK) has determined to make an off-market bid for all shares and options in Shannon Resources Limited (SHA)
Shareholders of Shannon Resources will be offered 10 cents for each fully paid share and 1 fully paid Carrick Gold share for every 2 shares held in Shannon Resources. In addition, holders of 20 cent options in Shannon Resources will be offered 1 fully paid Carrick Gold share for every 2 options.
The offer to shareholders of Shannon Resources reflects a premium of approximately 20 per cent to the volume weighted average price for shares in Shannon Resources in the 30 trading days prior to 16 February 2006 and the volume weighted average price for Carrick Gold shares in the same period.
The proposed offers are subject to a number of conditions. Full details of the offer conditions are set out in Annexure A to this letter.
Mr Frank Carr, the Executive Chairman of Carrick Gold and also the Chairman and largest shareholder of Shannon Resources, holding approximately 40 per cent of the issued capital of Shannon Resources, has indicated that he will accept the offer from Carrick Gold in the absence of a higher bid from any other party.
Carrick Gold is in the process of preparing a formal bidder's statement and will lodge that document with the Australian Securities Exchange and Australian Securities and Investments Commission shortly.
RATIONALE FOR THE OFFER
The extremely promising assay results received from drill programmes conducted since July 2006 on the Shannon Resources tenements and their proximity to the Carrick Gold tenements and resource (Figure 1) have convinced the Directors that the enormous potential of each set of tenements and consequent return for shareholders can best be maximised by the joint development of both.
Such a strategy will provide economies in drill programme planning, administration, and, ultimately, extraction. The respective locations of the two Companys' tenements also lend themselves to the establishment of a joint and centrally-located processing facility in due course.
