Independence Group takes issue with Panoramic capital raising
Spurned suitor Independence Group will not tip money into Panoramic Resources’ $33m capital raising.
Spurned suitor Independence Group will not tip money into Panoramic Resources’ $33m capital raising, saying it reserves the right to pull its all-scrip offer for the rival nickel producer in the wake of Panoramic’s latest emergency raising.
Panoramic ramped up its defence against Independence Group’s hostile bid on Thursday, announcing a 30c entitlement issue, underwritten by Morgans, immediately after its board recommended shareholders reject Independence Group’s one-for-13 scrip offer for the company.
The move is aimed at bolstering Panoramic’s cash position as it tries to convince shareholders its new management team — led by former Barminco boss Victor Rajasooriar, fresh from selling WA gold play Echo Resources to Northern Star Resources — can finally set to right the troubled restart of its Savannah nickel mine.
It is the third Panoramic capital raising this year, after a 28c-a-share issue for $28.2m in September and a $19.8m placement and entitlement issue at 38c in March, and comes only a day after the company lowered expectations of output from Savannah’s restart following Mr Rajasooriar’s review of progress at the mine. The review said Panoramic would abandon former plans to build its own workforce at Savannah and bring in a contract workforce, and said the company would need new equipment to makes its plans at the remote Kimberley mine work.
With both Independence Group and several potential rivals still in its data room, Panoramic’s board rejected the nickel and gold miner’s offer, telling shareholders it undervalued Savannah’s potential, asking them instead to kick in another $32.7m to get its development back on track.
The raising is a breach of one of Independence Goup’s key offer terms, and the company said it reserved the right to withdraw its offer as a result. And Morgans and its sub-underwriters will wear at least $1.2m of Panoramic’s new issue, with Independence Group saying late on Thursday it would not take part in the raising.
It is understood Independence Group will complete its due diligence process before deciding whether to proceed with its hostile bid, with a decision likely before Christmas.
Panoramic’s data room has been open since November 22 and, although several other nickel plays — including Western Areas, Mincor Resources and private equity-backed Black Mountain Metals — are believed to have looked at the numbers, the process is yet to yield a rival offer for the company.
The entitlement issue is scheduled to close on December 12.
Panoramic shares last traded at 36c. Independence Group shares closed up 6c at $5.84 on Thursday.