31/10/2011 - 15:36

Kingsgate launches $10m Laguna takeover bid

31/10/2011 - 15:36

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Kingsgate launches $10m Laguna takeover bid

Gold miner Kingsgate Consolidated has announced a $3.75 per share off-market takeover offer for the minority interest in Laguna Resources it does not already own.

Perth-based Laguna’s directors have confirmed they intend to accept Kingsgate’s offer in the absence of a superior bid, according to an independent expert’s advice that the deal is fair and reasonable

The offer values Laguna at approximately $37 million.

Kingsgate already holds 7.1 million of the 9.8 Laguna shares in the market place, valuing its bid to buy the rest of the stock it does not already own at more than $10 million.

Kingsgate chief executive Gavin Thomas said the offer made sense for Laguna shareholders to accept, with the target not holding any cash-generating assets and ever-increasing exploration costs.

“Laguna shareholders are currently faced with an illiquid investment requiring significant capital contributions over the next few years,” Mr Thomas said in a statement to the ASX.

“The offer allows them to realize the value of their investment in a timely and cost effective manner.

“Further, given the expected large ongoing capital requirements for the Nueva Esperanza project, optimum development of the project will best occur as a wholly-owned subsidiary within the Kingsgate Group.

Clayton Utz will act as Kingsgate’s corporate advisor, while BDO Corporate Finance has been appointed as Laguna’s independent expert.

Laguna’s stock last traded at $1.81, while Kingsgate Consolidated shares finished trade today down 2.9 cents, to $7.49.

 

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