21st Jan 2019 10:54
LONDON (Alliance News) - MOD Resources Ltd on Monday confirmed a AUD113 million, or around GBP63 million, an all-share takeover offer from Australia listed Sandfire Resources NL but said the offer undervalues the MOD's extensive assets.
The copper exploration company said it is willing to engage with Sandfire and grant due diligence if a compelling offer price is presented by Sandfire.
London listed shares of MOD were trading 65% higher at 23.11 pence each in late morning trade in London.
According to MOD, Sandfire last Wednesday made a an unsolicited and conditional stock offer equivalent to AUD0.38 per MOD share. The offer was equivalent to an exchange ratio of one Sandfire share for roughly every 17 MOD shares.
MOD said the offer is too low, considering MOD holds a dominant position in one of the last under-explored copper belts in the world and owns owns a high-quality copper development asset, the T3 copper project.
The Australia- and UK-listed explorer company has appointed Sternship Advisers as financial advisor and DLA Piper as legal advisor with respect to Sandfire's indicative proposal.
MOD separately has raised AUD15 million via share placement and rights issue.
The company raised AUD10 million through issue of 33.33 million shares at AUD0.30 per share, about 17 pence, a 36% premium to the company's last closing share price on Australian Stock Exchange.
It raised AUD5 million via a non-renounceable rights issue of 21.7 million shares, offering 1 new share per every 13 shares held. The rights issue was price at AUD0.24 per share, about 13 pence.
"Funding from this capital raise will enable the company to progress the T3 copper project towards a development decision and conduct further drilling for additional resources. The unsolicited, indicative proposal for 100% of the company received from Sandfire confirms the potential of the T3 copper project, however the board considers it significantly undervalues the assets of the company," MOD Managing Director Julian Hanna said.
"With strong ongoing support of our shareholders through a placement and a fully underwritten rights issue, we believe that the company will have sufficient working capital to achieve our objectives," Hanna added.
Metal Tiger, which owns 31.0 million shares in MOD, a 12% stake, noted the company's takeover and funding announcement.
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