Advanced Ghanaian gold explorer Azumah Mining (ASX:AZM) has been hit with a hostile takeover bid from Wa gold project joint venture partner, mining fund Ibaera Capital.
Yesterday, Ibaera lodged an unconditional all-cash offer with the ASX to purchase all outstanding shares in Azumah for 2.8c each.
Ibaera, which already holds 9.21 per cent of Azumah, has a 42.5 per cent (and growing) interest in the long-life, high-margin 1.03-million-ounce reserve Wa project.
The offer represented a big premium to Azumah’s historical share price — 100 per cent on the last closing price of 1.4c, and 48 per cent on the 12-month volume weighted average price of 1.9c per share.
The share price immediately jumped to 2.8c in afternoon trade – giving Azumah a market cap of about $27m.
But Azumah called the offer “highly opportunistic” in light on the strong gold price, a pending Wa project feasibility study, and upside potential from the underground discovery at Bepkong identified this year.
Last week, the explorer said that the final phase of works to complete the feasibility study had kicked off ahead of an “early 2020 delivery”.
Ibaera Capital would sole fund the remaining $US2.25m ($3.29m) required to complete the study. In exchange, it would increase its project stake to 46.5 per cent. Azumah would retain a majority ownership of 53.5 per cent.
Ibaera says it launched the hostile bid after the Azumah board failed to discuss “the optimal path for progressing the project” to production, and then ignored Ibaera’s efforts to acquire the outstanding shares in Azumah via a scheme of arrangement.
“Given the Azumah board has not, within the timeframe requested, indicated whether it will accept or reject Ibaera’s proposals, and given Ibaera’s belief that the proposals offered compelling value to Azumah shareholders, Ibaera has now formed the view that it is in the best interests of all stakeholders to make the unconditional all-cash offer directly to Azumah shareholders,” Ibaera says.
But Ibaera only gave the explorer two days to respond to this friendly takeover offer, Azumah says.
“Yesterday morning, Azumah responded requesting additional time to formulate its response,” the explorer said in a statement.
“The offer was launched today with no further correspondence from Ibaera.
“The board of Azumah advises shareholders to take no action while it reviews the unsolicited offer and Ibaera’s bidder’s statement.”
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