Shares in Hammer Metals rose to their highest price in over two years during Monday trade following a significant market update.
Hammer closed trade up 15 per cent to 7.6 cents.
The Daniel Thomas-led explorer, which has a sizeable copper and critical minerals-based tenement presence in Queensland’s Mt Isa region, told investors it had received a definitive written and binding proposal from Brisbane-based Austral Resources to acquire Hammer in a deal valued at $80.7 million.
Hammer shareholders would receive 1.2903 Austral shares for every share held, valued at 8 cents per Hammer share – with the overall consideration package representing a 31.6 per cent premium to the junior’s closing price on July 31.
On July 7, Hammer advised the market it had received an unsolicited, non-binding proposal from copper producer Austral – with this deal also valued at $80.7 million – but as it was non-binding and indicative, at the time it was not deemed a superior proposal to Larvotto Resources’ initial bid of $54 million back in June.
Aside from acquiring the company, Austral said it would propose the demerger of Hammer’s WA gold assets, of which Hammer shareholders would still own courtesy of a potential spinco arrangement.
As such, Hammer’s board at the time said it unanimously recommended shareholders vote in favour of Larvotto’s scheme implementation deed, in absence of a superior offer.
In Monday’s statement to the ASX, Hammer said its board had considered the binding proposal and that it considers Austral’s offer to be superior to that of Larvotto.
It has notified Larvotto of this, enacting a five-business day matching period, which it can use to match or table a superior offer should it wish to.
Should Austral’s bid be implemented, Hammer shareholders would own 31.1 per cent of the combined group, with the copper producer able to complement Hammer’s exploration territory with its existing operations and infrastructure in the Mt Isa region.
