04/01/2021 - 15:00

Shandong takes control of Cardinal

04/01/2021 - 15:00

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Shandong Gold has assumed control of Perth-based Cardinal Resources, following a nine-month bidding war with Russia's Nordgold and despite two late takeover proposals.

Shandong Gold has acquired more than 50 per cent of Cardinal's shares. Photo: Ingoe Doerrie

Shandong Gold has assumed control of Perth-based Cardinal Resources, following a nine-month bidding war with Russia's Nordgold and despite two late takeover proposals.

Shandong has secured more than 50 per cent of Cardinal’s shares, as announced on December 24, with respect to its $1.05 per share off-market takeover proposal.

The Chinese company has also amended its offer price to $1.075 per share, which will not close earlier than January 12.

Meanwhile, Nordgold said it was unable to justify an offer higher than $1.075 per Cardinal share, noting risks associated with mine development, entry into a new jurisdiction and Nordgold's required rate of return on new projects.

Nordgold has therefore decided to accept Shandong Gold’s offer, and as a result is no longer Cardinal’s largest shareholder,” Nordgold said last month.

Cardinal, which owns the 5.1 million ounce Namdini gold project in Ghana, had also received surprise bids from mining contractor Engineers & Planners and Emirati-Russian joint venture Dongshan Investments, which offered to pay $1.05 and $1.20 per share in November and December, respectively.

However, Cardinal recently said it had received no formal proposal from Dongshan that was “capable of acceptance”, and advised shareholders they should take no action towards the offer.

Engineers & Planners, which employs more than 4,000 workers including at two Gold Fields mines in Ghana, said on December 30 it would not proceed with its offer for Cardinal.

The Cardinal board has continued to recommend shareholders accept the offer from Shandong Gold.

Shares in Cardinal closed down 0.5 per cent today to trade at $1.07.

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