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Forrestania Resources has extended its takeover offer for Zenith Minerals for a tenth time.
The off-market offer, previously due to close on 21 October, will now stay open until 5pm AWST on 12 November. Forrestania is offering one of its shares for every 4.3 Zenith shares and held a relevant interest of about 58.61 per cent in Zenith on 14 October, including acceptances.
In its 14 October update, the company said it had complied with Takeovers Panel orders and intended to declare the bid unconditional as soon as it can. This follows a review by the Takeovers Panel that upheld an earlier declaration of unacceptable circumstances surrounding the takeover.
The takeover was also complicated by Forrestania’s $300 million acquisition of Edna May, completed on September 4. The panel identified disclosure deficiencies relating to Forrestania’s substantial holding in Zenith and its involvement in the acquisition of the Edna May gold project from Ramelius Resources.
The transaction comprised $210 million in cash and $90 million in Forrestania shares, with a separate $310 million capital raising supporting the acquisition and the company’s broader development plans.
Edna May added a 2.9-million-tonne-per-annum processing plant and an existing gold mineral resource of approximately 945,000 ounces to Forrestania’s Western Australian portfolio.
The review panel affirmed the original orders and accepted additional undertakings from Forrestania and Zenith concerning disclosure to shareholders, including the implications of Forrestania obtaining control without acquiring all remaining Zenith shares.
However, according to the panel, the acquisition and associated share issues materially changed Forrestania’s capital structure while its share-based takeover offer for Zenith remained open.
Zenith’s directors have maintained their recommendation that shareholders accept Forrestania’s offer in the absence of a superior proposal.
Forrestania executive chairman David Geraghty said he believed “the best home for Zenith’s Consolidated Dulcie Project” was within Forrestania, where Zenith shareholders could keep exposure to its development.
“The offer from Forrestania provides an opportunity for Zenith shareholders to exchange their interest in an early-stage gold exploration company for an interest in a company on the precipice of commencing its own gold production, which is evidence of our team’s ability to develop assets from potential to production in a short period of time,” he said.
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