Ramelius Resources Limited (ASX:RMS) has announced an off-market takeover bid offer to buy Brisbane-based gold exploration and development company, Explaurum Limited for $59 million. The acquisition offer comes after the strategic attempt to gain control over Explaurum’s Tampia Hill Project, located in the wheat belt of Western Australia, approximately 240km east of Perth.
The acquisitive gold miner Ramelius Resources has offered one Ramelius share for every four Explaurum shares held at an offer price of $0.123, reflecting 66.2% premium to the last closing price of Explaurum shares. However, the company has provided that the offer is not subject to any minimum acceptance threshold.
As per the company’s information, the acquisition seems to bring operational and capital cost synergies between Explaurum’s Tampia Hill Project and Ramelius’ 100% owned Edna May mine, while keeping the pace with ongoing exploration potential.
Although the offer claims to reduce Explaurum Shareholder risks associated with high debt levels, uncertainty over access to funding and dilutive capital raisings, Explaurum released a statement on the same day suggesting its shareholders to take no action in response to the offer. The Board of Explaurum Limited believes that this takeover bid has undervalued Explaurum’s assets.
For FY18 Ramelius reported net profit after tax of $30.8 million, an increase of 74% on FY17 NPAT. In the same year company has achieved record production of 208,118 ounces of gold, up 66% on FY17, for the full year ended 30 June 2018.
After falling 4.255% on the day of takeover bid announcement, i.e. 10 September 2018, RMS dropped by 1.111% to $0.445 on 11 September 2018.
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