07/09/2020 - 12:00

Shandong Gold raises Cardinal bid

07/09/2020 - 12:00

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Chinese-owned Shandong Gold has responded to an increased takeover bid for Cardinal Resources, having offered to buy the West Perth company for around $566 million.

Shandong Gold raises Cardinal bid
Shandong Gold has offered to buy gold explorer Cardinal Resources for $1 per company share. Photo: Ingo Doerrie

Chinese-owned Shandong Gold has responded to an increased takeover bid for Cardinal Resources, having offered to buy the West Perth company for around $566 million.

Shandong’s latest bid is for $1 per Cardinal share, which trumps a recent offer from rival bidder Nordgold of 90 cents per share.

The Russian-owned company first offered to buy Cardinal in March for 46 cents per share – or $227 million in cash – and was challenged by Shandong in June with an offer of 60 cents per share.

Nordgold responded in July with a 66-cent bid, which was trumped by Shandong later that month.

The Shanghai and Hong Kong-listed company had offered to pay 70 cents per Cardinal share, for a total consideration of around $395 million.

The Cardinal board subsequently endorsed the Shandong proposal and advised shareholders should reject the offer from Nordgold.

Cardinal said the deal with Shandong could be satisfied within a reasonable time frame, with the company having already sought all regulatory Chinese approvals, while a deal with Nordgold could be subject to regulatory issues, particularly in Canada.

Shandong also received approval from the Australian federal government last month to proceed with its takeover of Cardinal Resources, whose flagship asset is the 5.1 million-ounce Namdini gold project in Ghana.

That was followed by Nordgold’s latest bid to buy Cardinal for around $420.5 million.

However, Shandong had the opportunity to provide a matching or superior proposal to the revised offer from Nordgold, as part of its Bid Implementation Agreement signed with Cardinal in June.

Shandong’s latest offer, no longer subject to Chinese or Australian approvals, remains subject to a number of other conditions including approval of at least 50.1 per cent of Cardinal's shareholders.

Cardinal said it would consider the proposal in detail, and provide a further update to shareholders as soon as it was able to do so.

It has reiterated shareholders should take no action towards the Nordgold offer.

Shares in Cardinal were up 10.2 per cent at 12:07pm AEST to trade at $1.02.

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