ENTRY INTO TAKEOVER BID IMPLEMENTATION DEED WITH MEIJIN ENERGY GROUP LIMITED
The Board of DMC Mining Limited ("DMC" or the "Company") (ASX code: DMM) is pleased to announce that it has entered into a conditional Takeover Bid Implementation Deed ("TBID") with Meijin Energy Group Limited ("Meijin"), for Meijin to acquire all the ordinary shares in DMC for $0.50 per share in cash through an off-market takeover offer (“Meijin Offer”). A copy of the TBID is attached to this announcement.
The Meijin Offer, if made on satisfaction of certain preconditions, will value DMC at approximately A$43.4 million1 and will provide a premium of 66.7% to the closing price for DMC shares on the ASX on
22 March 2010 of A$0.30, the last trading day prior to the announcement of the unsolicited takeover offer from Cape Lambert Resources Limited ("Cape Lambert") of $0.46 per DMC share ("Cape Lambert Offer").
DMC’s Managing Director, David Sumich noted, “the Meijin Offer, if made, is a compelling offer for DMC shareholders, given it is priced at a premium of 8.7% to the Cape Lambert Offer”.
The obligation to make the Meijin Offer is subject to the following preconditions:
• completion of due diligence by Meijin on DMC;
• the entering into a pre-bid acceptance agreement with an entity associated with DMC’s Managing Director, David Sumich; and
• no "prescribed occurrences" occurring before the date of satisfaction of the preconditions noted above.
The preconditions need to be satisfied or waived by 5.00pm
DMC will update the market in due course as to the status of the satisfaction of the preconditions.
The Meijin Offer will be subject to a number of conditions, being a minimum acceptance condition of 48,700,000 shares and no prescribed occurrences, details of which are set out in full in schedule 1 of
the attached TBID.
A mutual break fee of A$150,000 is payable in certain circumstances as set out in clause 7 of the attached TBID.
DMC’s directors have agreed they will unanimously recommend that DMC shareholders accept the Meijin Offer if made, in the absence of a superior proposal and subject to the proposed price for each DMC share under the proposed Meijin Offer being within or above the valuation range for a DMC share ("Valuation Range") as assessed by an Independent Expert.
DMC’s directors have also indicated that they intend to accept the Meijin Offer, if made, in respect of their own shareholdings, in the absence of a superior proposal and subject to the consideration under the Meijin Offer being within or above the
BDO Corporate Finance (WA) Pty Ltd has been appointed as the Independent Expert to determine and advise whether the Cape Lambert Offer is fair and reasonable to DMC Shareholders not associated
with
As announced on 27 April 2010, the DMC Board recommends that, until such time as you receive the target’s statement (which will be issued on or before 10 May 2010) in respect of the
Offer, you should take no action with respect to the Cape Lambert Offer.
David Sumich noted, “Shareholders will be aware of the status of the preconditions to the Meijin Offer well before the closing date of the Cape Lambert Offer, of 25 May 2010. As such, we recommend that shareholders take no action at this time with respect to the Cape Lambert Offer.”
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