Cradle to accept $55m takeover offer

Niobium explorer Cradle Resources has recommended shareholders accept a takeover offer from joint venture partner Tremont Investments, which values the target at $55 million.

Denham Capital-backed Tremont has offered 33 cents in cash for each Cradle share it doesn’t already own, with the value representing a 37.3 per cent premium to Cradle’s 20-day volume-weighted average price.

Tremont already owns a 19.6 per cent stake in Cradle, and is Cradle’s joint venture partner in the Panda Hill niobium project in Tanzania (59.8:40.2 in favour of Tremont).

Cradle shareholders and directors which own a combined 45.5 per cent voting power in the target company have signalled their intention to vote in favour of the offer, with the directors unanimously recommending shareholders vote in favour in absence of a superior offer.

“This is a compelling proposal and provides Cradle shareholders with the opportunity to realise a significant premium,” Cradle chairman Ian Middlemas said.

“The all-cash offer of 33 cents per Cradle share provides shareholders with certainty of value and an opportunity to realise their investment in full for cash.

“Tremont’s management team shares our vision for the development of the Panda Hill project, and as such, we believe they are the right long-term partner for future customers, employees and other stakeholders in this capital intensive project.”

Argonaut is acting as financial adviser to Cradle, with DLA Piper as legal adviser.

King & Wood Mallesons is acting as legal adviser to Tremont, with KPMG Corporate Finance as corporate adviser.

Cradle shares surged on the news, rising 34.7 per cent to 31 cents each at 11:30am.