24/11/2020 - 11:00

New bid for Cardinal

24/11/2020 - 11:00

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A Ghanaian business has joined the battle to buy out Perth-based Cardinal Resources, topping previous bids for the gold explorer with a new cash offer of $1.05 per share.

New bid for Cardinal
Cardinal has received a new takeover offer from Ghana-based Engineers & Planners. Photo: Shane McLendon

A Ghanaian business has joined the battle to buy out Perth-based Cardinal Resources, topping previous bids for the gold explorer with a new cash offer of $1.05 per share.

Cardinal, which has been the subject of a seven month takeover battle between Russian-owned Nordgold and China’s Shandong Gold, received its latest offer from mining contractor Engineers & Planners.

The company employs more than 4,000 workers, including at two Gold Fields mines in Ghana.

Engineers & Planners is run by businessman Ibrahim Mahama, who is also the owner of a company representing MAN diesel trucks, a cement processing plant, and one of Ghana's largest poultry farms.

His offer for Cardinal trumps previous $1 per share bids from Nordgold and Shandong, which have been declared ‘best and final’.

Cardinal, which holds a market capitalisation of about $543 million, has advised shareholders to take no action towards the new offer while it considers the proposal.

The deal would require approval from just over half of Cardinal's shareholders.

Almost 28 per cent of the company is controlled by Nordgold, while 10.4 per cent is controlled by Shandong.

Cardinal received its first takeover proposal in March after Nordgold, which also has West African operations, offered to buy the company for 46 cents per share.

That was beaten by Shandong Gold's bid in June of 60 cents per share.

Cardinal has previously endorsed offers from Shandong but has been reluctant to accept any bid from Nordgold, noting that a deal with the Russian miner could be subject to regulatory approvals, particularly in Canada.

Euroz Hartleys Securities, Canaccord Genuity, and Canadian companies Maxit Capital and BMO Capital Markets are acting as financial advisers to Cardinal, while HopgoodGanim Lawyers and Calgary-based Bennett Jones are acting as legal advisers.

Cardinal's shares were up nearly 6 per cent at 2:46pm AEDT to trade at $1.07.

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