Market experts are betting that Kinterra Resources winds up winning the heated takeover battle for Australian listed copper miner New World Resources, as the group ups the ante with a Takeover Panel challenge.
The Canadian private equity firm Kinterra owns the Nevada Copper project, Pumpkin Hollow, located in the US state of Nevada.
It is in the same region as New World’s flagship Antler Copper project in Arizona.
Kinterra can gain more synergies from buying the business compared to its bidding rival, the UK-listed Central Asia Metals Ltd (CAML), which owns assets in Kazakhstan and Europe.
The appeal for CAML to the business is that it is the owner of base metal mines globally.
New World is currently being bid for at 6.2c per share, which is almost the price that some analysts were valuing the stock.
Shares closed at 6.3c, which suggests the market believes a higher offer is on its way, taking its market value to $229m.
The copper miner told the market on Wednesday that Kinterra had applied to The Takeovers Panel seeking interim orders preventing CAML’s $10m placement in the company from occurring and preventing CAML from acquiring any further New World shares until the hearing of the application.
Kinterra owns over 19 per cent of the stock.
The company on May 21 had entered into a deal for CAML to buy the business for 5c a share, and then CAML lifted its offer to 5.3c and made a parallel takeover bid subject to a minimum 50.1 per cent holding.
It also committed to buy 5 per cent of the stock through a $10m placement at that price.
The placement was subject to no competing proposal being received by July 4 deemed to be superior.
But Kinterra bid 5.7c on June 23 and lifted its interest to 19.16 per cent.
The board said that “may reasonably be expected to lead to a superior proposal”.
CAML lifted its holding to 12.08 per cent and offered 6.2c per share.
On June 30, Kinterra also lifted its offer to 6.2c.
Kinterra’s takeovers panel application argues that New World and CAML sought to actively frustrate the auction for control by entering into the CAML placement agreement and failing to terminate the CAML placement agreement despite the relevant condition for the termination of that agreement having been satisfied and despite Kinterra’s repeated offer of alternative debt financing.
It also argues that CAML has acquired its existing shareholding in contravention of various provisions of the corporations act, including the insider trading, market manipulation and misleading and deceptive conduct provisions in the act.
It argued the auction is not taking place in an efficient, competitive and informed market contrary to section 602 of the Corporations Act.
Add your comment to this story
CC Capital readies binding offer for Insignia Financial
Shares in Insignia Financial closed up on chatter that suitor CC Capital was putting the finishing touches on a takeover bid.
Coronado blocks suitors’ due diligence
The struggling coal miner is understood to have received multiple takeover offers, but sources say the group will not allow them to inspect the books.
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout