The Takeovers Panel has rejected a request from Perth-based Cardinal Resources to improve separate takeover offers from Russian mining giant Nordgold and China’s Shandong Gold.
The Australian Takeovers Panel has rejected a request from Perth-based Cardinal Resources to improve separate takeover offers from Russian mining giant Nordgold and China’s Shandong Gold.
Cardinal is the subject of a six month takeover battle between Nordgold and Shandong, which have both offered to buy Cardinal for $1 per share.
Nordgold had first offered to buy Cardinal in March, for 46 cents per share.
That was beaten by an offer from Shandong in June of 60 cents per Cardinal share.
Cardinal, which owns the 5.1 million ounce Namdini gold project in Ghana, has been reluctant to endorse an offer from Nordgold, noting that a deal with the Russian miner could be subject to regulatory issues, particularly in Canada.
However, Nordgold claims its on-market bid has superior payment terms compared to Shandong's off-market proposal.
"Nordgold is the better operator, with a strong West African track record, while Shandong has no record in the region," a Nordgold spokesperson told Business News.
Nordgold is the largest shareholder in Cardinal, with a 28 per cent stake in the company.
It has declared its $1 per share offer as 'best and final', along with Shandong Gold.
Cardinal and its 5.5 per cent shareholder, Samson Rock Capital, recently submitted an application to the Australian Takeovers Panel late last month, requesting that Nordgold and Shandong be permitted to raise their offer prices above $1.
That was under the condition that the successful bidder would compensate any person who had sold their Cardinal shares on-market after the bidder’s ‘best and final’ statement.
However, the panel has declined to conduct proceedings.
“The panel concluded there was no reasonable prospect that it would make a declaration of unacceptable circumstances,” it said this morning.
At the same time, the panel said it would not proceed with an application made by Shandong Gold in late October.
Shandong submitted that Nordgold had acquired a relevant interest in Cardinal shareholder MM Asset Management prior to MMAM accepting into the Nordgold bid, boosting the miner’s voting power to above 20 per cent.
But the panel said Shandong did not provide sufficient probative material in its application.
The panel is due to publish its reasons for both decisions.
Cardinal shares were trading 1.9 per cent lower at 2:14pm AEDT to $1.02.
