26th May 2016 11:14
LONDON (Alliance News) - African-focused precious metals miner Pan African Resources PLC on Thursday said it has made an offer to acquire further interest in Shanduka Gold, after Jadeita Ltd, which owns a 33.6% stake in Shanduka, exercised its tag-along right to Pan African's previous deal.
In February, Pan African entered into a sale of shares agreement to acquire the 16.9% stake held in Shanduka Gold by The Standard Bank of South Africa Ltd. The other shareholders in Shanduka Gold were The Mabindu Business Development Trust, which held a 49.5% interest, and Jadeite, which held a 33.6% stake.
Shanduka Gold is Pan African's primary black economic empowerment shareholder, which holds a 23.8% stake in Pan African at a corporate level. Under South African law, companies operating in the area must supply a minimum stake to a black economic empowerment organisation.
On Thursday, Pan African said Jadeite has exercised its tag-along right, which was included in Pan African's previous deal, meaning Pan African is now required to make an offer to acquire Jadeite's 33.6% interest in Shanduka Gold on "materially the same terms as the Standard Bank of South Africa transaction".
Jadeite has not yet accepted the offer, Pan African said, but if the company does then both the Standard Bank and Jadeite transactions are expected to be concluded simultaneously on or around June 7. In total Pan African will pay GBP23.9 million for the 50.5% stake in Shanduka Gold, to be settled in cash from its existing reserves and facilities, as well as from the proceeds of a share placing, announced on Thursday.
A maximum of 111.7 million Pan African shares will be issued to certain shareholders and new institutional investors, Pan African said, adding that the completion of the placing is subject to the Jadeite deal becoming unconditional in all respects.
In anticipation of completion of the placing, Pan African said it has concluded a bookbuild, securing undertaking from the investors to acquire the shares.
Should the placing proceed, the shares will be acquired by the investors at 14.25 pence per share, a premium of 5.1% to the 30-day volume weighted average traded price of a Pan African share as at May 25. Pan African will look to raise a maximum of GBP15.9 million in the placing, with the remaining portion of the Shanduka Gold interest purchase being settled using cash reserves.
Shares in Pan African were up 7.8% at 13.75p on Thursday.
The placing comprises of two separate but simultaneous and co-ordinated placings in the United Kingdom and South Africa. Numis and Peel Hunt will act as bookrunners for the UK placing.
The placing shares will represent around 5.7% of the enlarged issued share capital, Pan African said.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Pan African Resources