25th Jun 2019 09:32
LONDON (Alliance News) - Botswana-focused copper miner MOD Resources Ltd on Tuesday said it has agreed to a AUD167 million, or GBP91.1 million, takeover offer from Australian copper-gold producer Sandfire Resources NL.
London-listed shares in MOD were trading 22% higher at 21.40 pence each.
MOD Resources said the acquisition represents an attractive premium for shareholders, while providing a funding solution for the development of T3 Project and retaining exposure to company's significant exploration potential.
Sandfire Resources will acquire 100% of MOD Resources by way of a scheme of arrangement, valued at AUD0.45 per MOD share. The consideration represents a premium of 45% to the closing price of AUD0.310 per share on Monday.
MOD shareholders will either be able to elect a scrip consideration of 0.0664 Sandfire shares for every 1 MOD share held or cash consideration of AUD0.45 per share. The total cash consideration payable to MOD shareholders who elect the cash option is capped at AUD41.6 million.
Metal Tiger, which currently owns a 10.5% stake in MOD, has agreed to vote in favour of the acquisition scheme. MOD directors, who together own a 7.0% stake, have also confirmed their intention to vote in favour of the deal.
"We see this partnership as providing the opportunity to maximise value from T3 which can be funded from Sandfire's balance sheet and cash flows. At the same time, it will provide MOD shareholders with exposure to Sandfire's substantial high-grade copper production in Australia and the outstanding potential of MOD's extensive licence holdings through an accelerated exploration program," said MOD Managing Director Julian Hanna.
Shares in Metal Tiger were up 14% at 1.4865p each.
Related Shares:
MTR.LMOD.L