Adastra Minerals (AAA-T, AAA-L) continues to urge shareholders to tender to a twice-sweetened offer from First Quantum Minerals (FM-T, FMQ-L), after London-based Mwana Africa (MWA-L) launched a last minute, all-cash takeover offer of at least $3.85 per share.
Adastra says that while Mwana’s bid trumps the current value of First Quantum’s offer, it is conditional on Mwana shareholder approval, due diligence, and the confirmation that Adastra’s project financing package for the Kolwezi project in the Democratic Republic of the Congo (DRC) is executable.
First Quantum’s bid of $2.92 per share, or one of its own share for every 14.76 Adastra common shares plus 26.5 in cash expires at midnight in Toronto on Apr. 28. Assuming full pro ration, the offer equates to around 47.5 in cash accompanied by 0.057 of a First Quantum share for each share of Adastra. Based on First Quantum’s share price late on Apr. 27, the offer values Adastra shares at around $3.50 apiece.
The deal requires at least 50.1% of Adastra’s shares to be handed over. It also includes a $4.8-million break fee payable by Adastra. First Quantum retains the right to match any such offer.
Adastra also warns its shareholders that there is no assurance of a formal offer from Mwana, and that even if such an offer were received, it would not be completed until at least June, whereas First Quantum’s offer is to soon expire.
Mwana said it would fund the acquisition via existing cash bolstered by a convertible loan stock structure, which would be fully underwritten by JPMorgan Cazenove. The company recently placed 66.9 million shares for gross proceeds of 42.1 million (US$76.1 million).
Mwana was formed in late 2005 via privately held Mwana Africa Holdings’ reverse takeover of African Gold. The company has operating assets in Zimbabwe and development prospects and exploration licenses in Ghana, Zimbabwe and the DRC.
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