12/11/2018 - 11:07

Ramelius lifts Explaurum offer to $73m

12/11/2018 - 11:07


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Ramelius Resources has increased its takeover bid for gold-focused Explaurum, with the miner making an indicative $73.4 million offer after its first proposal was rejected.

Mark Zeptner says Ramelius is pleased to have entered into discussions with Explaurum. Photo: Gabriel Oliveira

Ramelius Resources has increased its takeover bid for gold-focused Explaurum, with the miner making an indicative $73.4 million offer after its first proposal was rejected.

The new bid, which is conditional, non-binding and incomplete, includes a cash consideration of 5 cents per Explaurum share, in addition to the existing scrip offer.

Under the scrip offer, Ramelius will exchange one share for every four Explaurum shares, leaving Explaurum's shareholders with a 19.8 per cent stake in the combined entity.

Based on Ramelius’s closing share price on Friday, the new deal values Explaurum at 15.25 cents per share, or $73.4 million.

Mark Zeptner-led Ramelius launched its original hostile scrip bid in September, which was rejected by Explaurum’s board.

Explaurum said it had granted Ramelius a limited period of due diligence.

“The proposal is incomplete and remains subject to ongoing discussions between the parties,” the gold explorer said in a statement to the ASX.

“There is no certainty that these discussions, or associated due diligence activities by Ramelius, will result in a revised takeover offer from Ramelius that is capable of acceptance by Explaurum shareholders, nor in the event of such a revised offer, what the specific terms and conditions of that revised offer would be.”

Ramelius managing director Mr Zeptner said the company was pleased to have entered into discussions with Explaurum.

“We look forward to finalising our due diligence process and working with Explaurum in order to bring a binding offer to its shareholders that has the mutual recommendation of both groups,” he said.

Adelaide Equity Partners is acting as Ramelius’s financial adviser to the offer, while Allion Partners is acting as its legal adviser.

Ironstone Capital Partners is acting as Explaurum’s financial adviser while Thomson Geer is acting as legal adviser.

Explaurum recently announced a planned $8 million share placement by Alkane Resources, which breached the conditions of the initial Ramelius offer.

The exploration company said today Alkane would not cancel its subscription agreement based on today’s announcement, but if the takeover deal progressed further it may consider terminating the placement.

“In the interim, the Explaurum board continues to recommend that Explaurum shareholders reject the current inadequate takeover offer from Ramelius by taking no action,” Explaurum said.

Meanwhile, the Takeovers Panel has declined to conduct proceedings on an application from Ramelius in relation to the affairs of Explaurum.

Ramelius had sought interim orders that Explaurum be prohibited from reiterating any undervalue statement in relation to the gold miner’s takeover offer and final orders that the explorer lodge a new target’s statement with correct information.

Following discussions with the panel, Explaurum released its fifth supplementary target’s statement confirming that it would facilitate the provision of an independent expert’s report

Explaurum also retracted statements in the target’s statement relating to reserve contributions which the panel considered were misleading.

The panel said that given these developments it would not declare unacceptable circumstances and would not conduct proceedings.

Shares in Explaurum were 18.18 per cent higher at 13 cents each at 1.40pm AEDT, while Ramelius shares were 4.88 per cent off at 39 cents each.


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