4th Feb 2021 09:24
(Alliance News) -Â Nova Resources BV on Thursday said it has agreed on a "significantly increased offer" for miner Kaz Minerals PLC amid a rally in copper prices since October.
Shares in Kaz were up 3.1% at 797.88 pence in London on Thursday, giving it a market capitalisation of around GBP3.77 billion. The stock up roughly 80% over the past 12 months.
Nova has now agreed to pay 780p in cash for each Kaz share, valuing the company as a whole at GBP3.7 billion. Nova is a company owned by a consortium comprising Kaz Chair Oleg Novachuk and Non-Executive Director Vladimir Kim.
The new price represents a 22% premium to the original offer price of 640p, announced on October 28, 2020, and a 37% premium to Kaz's share price of 570.8p on October 27.
"Following improved market conditions towards the end of 2020 the independent committee of Kaz Minerals has been engaged in extensive negotiations with Bidco. Today, we are pleased to announce a substantial increase in their offer to 780 pence per share," said Michael Lynch-Bell, chair of Kaz's independent committee.
The independent committee noted that the London Metal Exchange copper price had increased by 14% since October 26 and warned Nova that, if these improved market conditions persisted, it would expect to withdraw its recommendation of the acquisition unless a higher price was forthcoming. After talks, Nova offered a revised 730p per share, which the committee rejected after "careful consideration" on the grounds that it undervalued the company.
On January 30, Nova put forward a further increased bid of 780p.
"This increase in Bidco's offer was achieved through the work of the independent committee that was established following the initial approach from Bidco and allows Kaz Minerals shareholders to realise cash consideration for their shares at an attractive price, while recognising the increasing risks to the Baimskaya project," said Lynch-Bell. "Based on our assessment after taking advice, and following consultation with shareholders, the independent committee unanimously recommends that Kaz Minerals shareholders accept this higher offer."
By Lucy Heming;Â [email protected]
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