Now there’s one way of seeing off an unwanted takeover offer – do what the putative bidder doesn’t want to do, such as announce a capital raising when the bidder, Independence Group made such a move a condition of the offer failing.
And to rub home its rejection, Panoramic Resources directors unanimously recommended shareholders rejected the $312 million takeover offer from Independence Group.
The ASX-listed nickel miner said in a statement on Thursday the all paper offer was the “opportunistically timed” and shareholders would reduce their exposure to “near-term improvements in operational performance” if they accepted.
Shareholders also should wait to see if a superior offer emerged, it added.
Independence launched the now hostile bid on November 4, offering one of its shares for every 13 Panoramic shares held, with an implied offer price of 47.6 cents a Panoramic share.
Panoramic on Thursday also announced a 1 for 6 accelerated pro-rata non-renounceable entitlement offer to raise about $31 million after costs.
The offer price is 30 cents a share, a 16.7% discount to the last closing price of 36 cents and a very obvious thumbs down to the Independence approach.
Independence restated last month that any capital-raising offer by Panoramic would represent a breach of their offer.
Panoramic shares were halted yesterday to allow the funding raising to occur.
The company justified the raising in yesterday’s announcement, saying:
“As foreshadowed in its announcement dated 25 November 2019, as a result of the updated FY2020 production guidance and factoring in the softening in the US$ nickel price since the end of the September 2019 quarter, the Company has undertaken a re-forecasting of its cash flows and determined it needed short term funding of $30 million (after costs).
“After extensive review, the Company has determined this is best achieved through the Entitlement Offer. The Entitlement Offer will provide all eligible shareholders with the opportunity to participate and retain exposure to the Company’s 100% owned Savannah Project as well as its portfolio of PGM assets and other listed investments.
“There is no certainty the IGO Takeover Offer will extend to New Shares issued under the Entitlement Offer,” directors added.
The institutional entitlement offer started yesterday and ends on Monday, December 9, 2019.
Eligible institutional shareholders will be invited to participate in the Institutional Entitlement Offer and can choose to take up all, part or none of their Entitlement. The Retail Entitlement Offer will open on December 12, 2019, and is expected to close at 5.00 pm (Perth time) on December 23.