21/02/2018 - 10:47

Primary receives $37.5m takeover offer

21/02/2018 - 10:47

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After selling its Southern Cross gold operation last year, Chinese-owned Hanking Gold Mining has made a takeover proposal for Primary Gold worth $37.5 million.

Primary receives $37.5m takeover offer
Primary has gold projects in the Northern Territory and Coolgardie.

After selling its Southern Cross gold operation last year, Chinese-owned Hanking Gold Mining has made a takeover proposal for Primary Gold worth $37.5 million.

Primary told the market today it had received an off-market takeover from major shareholder Hanking, which has an 8.4 per cent stake in the company.

The all-cash deal is worth 5.75 cents per share, representing a 35.4 per cent premium on the target’s 30-day volume-weighted average price.

The proposal has been unanimously recommended by the company’s independent directors.

“Hanking Australia’s offer provides Primary shareholders with an attractive opportunity to realise a significant premium and certain cash value for their investment in Primary,” executive chairman Garry Mills said

“The independent directors of Primary intend to accept the offer, in the absence of a superior proposal and subject to the independent expert not concluding that the offer is not fair and not reasonable.”

The offer is subject to a number of conditions including receiving a minimum acceptance of 50 per cent and Foreign Investment Review Board approval.

Under the proposal, Hanking has also agreed to provide a $1.5 million unsecured loan facility to Primary.

Primary has gold projects in the Northern Territory and Coolgardie.  

Longreach Capital is acting as Primary's financial adviser, while Bellanhouse Lawyers is the company's legal adviser.

Hanking is advised by Argonau and MinterEllison.

Hanking sold its Southern Cross gold mine for $330 million to Chinese conglomerate Shandong Tyan Home in February last year.

Hanking is led by managing director Mark Qiu, who has also been a non-executive director with Primary since 2014.

Shares in Primary were up 30.7 per cent to 5.1 cents at 1pm AEDT. 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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