Economic & Industrial

Nordgold taps Takeovers panel in Cardinal tussle

Nordgold taps Takeovers panel in Cardinal tussle
Mining News Pro - Gold miner Nordgold has turned to the Australian Takeovers Panel in its quest to gain ownership of ASX-listed Cardinal Resources, claiming that the takeover target was providing "misleading" statements to the market and creating a false market for the company’s shares.

Nordgold, which holds a 27.8% interest in Cardinal, on Wednesday this week increased its offer price for Cardinal shares from 90c a share to A$1 a share, matching an offer from fellow-suitor Shandong Gold Mining.

The increased Nordgold offer was made after Shandong had lodged its second supplementary bidder’s statement, saying that its own A$1-a-share offer price was its best and final offer in the absence of a higher competing offer.

Following Nordgold’s increased offer, the ASX- and TSX-listed Cardinal told shareholders that it was seeking clarification from Shandong that Nordgold’s increased offer was considered to be a "higher competing offer", allowing Shandong to increase its own offer despite having issued a final offer notice.

In its application to the Takeovers Panel, Nordgold pointed out that its own third supplementary bidder’s statement had stated that the increased offer price was not "a higher competing offer" than that offered by Shandong.

Nordgold claimed that Cardinal was providing misleading comments to the market, and had created uncertainty around the interpretation of Shandong’s last and final statement, implying that the Chinese suitor could be released from the legal consequence of its last and final statement.

The gold miner also claimed that Cardinal was creating a false market for its shares, as Cardinal shares had been traded based on the "misleading" information provided by the company.

Furthermore, Nordgold claimed that the process for control of Cardinal was not taking place in an efficient, competitive and informed market, and that Cardinal shareholders had not been given enough information to enable shareholders to assess the merits of the proposals.

Nordgold was seeking interim and final orders that Cardinal would correct its earlier statements and reaffirmed that Shandong was unable to increase its offer price, unless an offer of above A$1 a share was made to the market, and that Shandong not be able to depart from its last and final statement.

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