Panoramic Resources shares jumped more than 34% at one stage yesterday after it revealed a $312 million all paper takeover offer from Independence Group.
In reply, the board of Panoramic released a letter to shareholders telling them to take no action, but it would seem that it had been resisting takeover approaches from Independence for a while, meaning the bid should be considered hostile for the moment.
Independence Group said it will make a 1-for-13 bid for 100 percent of shares in Panoramic Resources, an offer worth about $312 million. The offer price is about 47.6¢ a Panoramic Share, which closed at 34¢ on Friday.
Independence wrote to Panoramic shareholders on Monday telling them the direct offer comes ‘’following a number of unsuccessful attempts to engage with the Panoramic Board on a change of control transaction”. It already owns 3.8% of Panoramic shares.
“The offer represents a rare instance of genuine and obvious mutual benefit for both Panoramic and IGO shareholders,” IGO’s managing director Peter Bradford told Panoramic shareholders in a letter this morning.
“Panoramic shareholders will be able to crystallise future value from Savannah at a very attractive price and retain exposure to its upside potential, while also gaining exposure to Nova and Tropicana and IGO’s extensive portfolio of belt-scale exploration projects prospective for nickel and copper.”
Independence also noted the recent changes to Panoramic’s board and senior management.
The target company has a new CEO starting next week, a new board chairman starting the week after, and is searching for a new chief financial officer.
Independence CEO Peter Bradford said that as Australia’s largest independent nickel producer, Independence Group was well-positioned to unlock value from Panoramic’s Savannah nickel mine and processing plant in East Kimberly, Western Australia, which is adjacent to some of Independence Group’s landholdings.
Panoramic restarted mining at Savannah in February after the price of nickel rebounded sharply.
Panoramic also has a 51 percent interest in ASX-listed Horizon Gold, which is developing its Gum Creek gold project in Western Australia, as well as other exploration rights.
Panoramic shares ended the day up 28.6% at 42.5 cents. Independence shares were down 0.8% at $6.35.