Geopacific lobs takeover bid for Kula

Perth-based Geopacific Resources has put forward a takeover bid for its joint venture partner, gold-focused Kula Gold, in an all-scrip deal that values the target at about $9.3 million.

Geopacific intends to make an off-market takeover offer to wholly acquire Perth-based Kula in exchange for one of its shares for every 1.47 Kula shares.

The deal values Kula at 2.8 cents per share, and represents a 25 per cent premium to its five-day volume-weighted average price.

Geopacific has already received a pre-bid acceptance from investment manager Franklin Advisers, which holds a 17 per cent stake in Kula on behalf of certain funds and accounts.

The deal needs a minimum 90 per cent acceptance to be successful.

“Geopacific and Kula exist for the same ultimate objective of advancing the Woodlark gold project to development,” Geopacific managing director Ron Heeks said.

“However, the current dual ownership structure is inefficient, expensive and a combined, single entity is likely to be significantly more attractive for investors and financiers.

“Simplifying this structure is the next logical step in advancing the project for the benefit of the shareholders of both companies.”

Kula is yet to respond to the proposal.

Geopacific began farming into the Woodlark project in July last year, with the option to earn up to a 80 per cent stake by spending up to $18.6 million.

Geopacific shares were 2.3 per cent lower to 4.1 cents each, while Kula shares were 35 per cent higher to 2.7 cents each, at 10:30am.