Monsters of Rock: NCZ shareholders jump at Sibanye offer, Red 5 sinks on raise, not-so-Nifty Cyprium heads back to drawing board
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New Century Resources’ (ASX:NCZ) takeover defence has lasted less than two days, with shareholders jumping at the opportunity to divest their holdings after major shareholder Sibanye-Stillwater launched a hostile off-market takeover bid for the zinc producer on Tuesday.
The NCZ board had recommended shareholders take no action in response to the $1.10 per share cash offer, which took advantage of a 59% drop in the company’s share price over the preceding six months.
The offer was a 42.9% premium to New Century’s trading price at Monday’s close, and 21.5% premium over its one month VWAP.
It prompted a “take no action” call from New Century’s board, which acknowledged the offer was “stated to be best and final in the absence of a competing proposal”.
“The Board also notes that Sibanye-Stillwater intends to place a buy order on the ASX to acquire up to a further 10.92% of the total New Century shares on issue on market at or below a price of A$1.10 per Share,” NCZ said on Tuesday.
“New Century shareholders who sell their shares to Sibanye-Stillwater on-market will be unable to participate in any increase in the offer price or any competing proposal should any such an increase or competing proposal be forthcoming.”
They won’t be waiting for a competing proposal, with the recommendation providing less resistance than the 1996 Fitzroy Lions.
A change in substantial holding notice posted to the ASX today said the South African-American platinum and gold giant had acquired a further 41.5m shares since making its announcement two days ago, taking its voting power past 50% to 51.41%.
It said it had placed a further buy order on market, with 13 million shares to be purchased at or below $1.10 during the bid period.
“This will further enable remaining New Century shareholders who are looking to sell their Shares on market to dispose of their holdings in an orderly manner and receive payment on T+2 terms,” the company said.
“Any On-Market Purchases made will be disclosed to the ASX in any substantial shareholder notice which Sibanye Australia is required to lodge under the Corporations Act. Sibanye Australia reserves its right to amend, cancel or place additional On-Market Purchases on the ASX or Cboe.”
The notice came as it was revealed US-based Luxor Capital had sold out of more than 13.6m shares at the $1.10 bid price on Tuesday.
Sibanye said on Tuesday its acquisition of its initial 19.99% stake in NCZ was to increase its exposure to the circular economy. NCZ is reprocessing tailings from the Century Zinc mine in North Queensland, but was also eyeing off the restart of the old Mount Lyell copper mine in Tassie.
But in its bidder’s statement Sibanye scrutinised the $279m capital requirement for the Mt Lyell development, warning of dilution through future equity raisings, and said it plans to refocus its strategic direction on growing NCZ’s tailings retreatment business.
Red 5’s (ASX:RED) return to equity markets for the second time in under six months has left a sour taste for investors, who have pummelled the stock by 21.4% after the gold miner re-emerged to trade after announcing the completion of a $90 million cash call.
The $80m placement came at a 22.9% discount to its Monday price of 17.5c, with a $10m fully underwritten share purchase plan also announced.
It takes the amount of equity raised by Red 5 to $150m over the past six months, announcement sandwiching the news the company had hit commercial production at its King of the Hills gold mine.
The project, which carried an initial capex bill of $226m, is expected to produce 90,000-105,000oz at all in sustaining costs of $1750-1950/oz in the second half of FY23.
But Red 5 closed the December quarter with $26m in cash and bullion, putting pressure on to strengthen its balance sheet.
“We are delighted with the support for the Placement. I would like to sincerely thank our existing shareholders for their ongoing support and welcome a number of new highly credentialled investors to the register,” Red 5 MD Mark Williams said.
“Following the completion of the equity raising, the KOTH operations will benefit from a stronger balance sheet and is well positioned for future growth.”
Shares in the $370 million capped gold producer are down almost 60% over the past year.
Copper hopeful Cyprium Metals (ASX:CYM) will have to cancel its own recent equity raising, after it decided financing terms for a $240-260m debt fund to restart its Nifty copper mine in WA weren’t commercially satisfactory.
It will remain in voluntary suspension while it hunts an alternative financing proposal to support the redevelopment of the Pilbara operations.
It came on a weak day for the materials sector, which tumbled 1.56%.
The population of that particular municipality included Rio Tinto (ASX:RIO) as well, down 1.68% after revealing a 41% fall in profits and 38% cut to its full year dividend in its post-market full year results release yesterday.