Ramelius Resources announced a better offer to acquire 100% interest in ASX listed gold explorer, Explaurum Limited.
In a release dated 13 December 2018, Ramelius Resources Limited (ASX: RMS) pitched the company’s intention to increase its current bid by $0.02 cash per share in addition to current share consideration of 1 Ramelius share for every 4 Explaurum shares. This translates a final offer of A$0.134 per Explaurum share, reflecting a premium of 57.6% to the Explaurum last traded price of A$0.085 as at 12th December 2018.
Ramelius’ Managing Director, Mark Zeptner stated that Ramelius improved offer is an ideal proposal to deliver higher returns to the shareholders of both the companies while developing the flagship Tampia gold project.
Moreover, the improved offer by Ramelius has already got the green card from Explaurum’s major shareholders representing approximately 14.3% of Explaurum. This will take Ramelius’ stakes in Explaurum to increase to 19.9%. The ones holding 14.3% of Explaurum have also revealed their intention to vote against the competitive bid placed by Alkane Transaction. It seems to be driven by the compelling premium price that Ramelius has offered over and above 11.7% of what Alkane quoted. However, the final votes are due to be received by Explaurum shareholders at its general meeting scheduled for 21 December 2018.
If Explaurum would not accept the Alkane Transaction, Ramelius has put forward its intention to proceed immediately with the ‘Unconditional’ offer to acquire all the shares of Explaurum Limited. In such condition, Explaurum Shareholders will be given 14 days’ time period to accept the offer after that.
Ramelius has also completed the due diligence of Explaurum’s Tampia Hill Project located 240km east of Perth in Western Australia. In this due diligence process, Ramelius discovered that Tampia resource did not seem to financially support the building of independent processing facility without making further exploration activities.
Further, the bidder believes that their revised offer would fall within the valuation range of Independent Experts and therefore it reflects a ‘Fair and Reasonable’ offer. As per the company’s information, this revised offer will close on 25 January 2019.
In today’s trading session, Ramelius share price plunged 4.369% to last trade at $0.435 as at 13 December 2018. Its price to earnings ratio was 7.790x with a market capitalization of $240.51 million. Over the past one year, RMS’ stock price has increased by 33.82%, but in the past six months, a plunge of 20.87% has been seen in the daily price change of Ramelius Resources’ stock.
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