Mungana shareholders reject Auctus offer

Private equity group Auctus Chillagoe’s proposed takeover of Mungana Goldmines looks set to be defeated, with Mungana’s major shareholders announcing their intention not to accept the offer.

In a statement today, Mungana said FTI Consulting, the liquidator of shareholders Kagara and MPL, has notified the company that it does not intend to accept Auctus’s takeover offer of 13.5 cents per share.

Kagara and MPL together hold about 72.2 per cent of Mungana’s total shares on issue.

It follows news last month that an independent expert found the offer the offer to be both unfair and reasonable, and was opportunistic and undervalued the business.

In a letter to Mungana, the shareholders’ liquidators stated that the offer did not represent a fair market value for their investment in Mungana, and they continued to support the company board’s current strategy for the business.

Independent expert Gant Thonton has valued ordinary shares in Mungana at between 24 cents and 31 cents.

“Your directors continue to unanimously recommend that you reject the Auctus offer,” Mungana said in a statement.

Auctus, backed by private equity group Denham Capital, issued Mungana the takeover proposal in April.

Acutus is a special-purpose entity led by former Karara Mining boss Steve Murdoch.

Mungana is an offshoot of former miner Kagara (not to be confused with Karara Mining), which entered voluntary administration in 2012.

It’s focus is on its King Vol zinc project in Queensland.