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Independence Group conducting due diligence on Panoramic
Posted on Friday, 22 November 2019 12:09
Australian metals miner Independence Group has announced that it will carry out due diligence before competing its planned acquisition of Perth-headquartered peer Panoramic Resources.
On 4th November, the suitor agreed to pay an implied offer price of AUD 0.48 (USD 0.33) per item of stock in the business, thereby picking up the remaining 96.2 per cent stake it does not already own for AUD 299.55 million.
The bid will see Independence Group issue one share in itself for every 13 held in Panoramic.
Panoramic has yet to advise shareholders on whether or not they should accept the approach, advising that they should take no action until they receive its statement.
Zephyr, the M&A database published by Bureau van Dijk, shows the transaction is the ninth-largest targeting an Australian provider of mining, quarrying and oil and gas services to have been announced worldwide during 2019 to date.
However, the deal hit a snag last week, when it was announced that the prospective target may have breached, or is likely to breach, a number of conditions relating to the takeover due to an unspecified downgrade to production guidance at its Savannah project for fiscal 2020.
Panoramic may need to raise additional capital via an entitlement offer as a consequence of operational issues affecting its financial position.
As such, the parties have now entered into a confidentiality deed allowing Independence Group to carry out due diligence on the target and its Savannah project, a process which is likely to take place until early in December.
The buyer noted that it would be within its rights to terminate the deal if an equity raising is announced as doing so would breach the terms of the original agreement.
Panoramic said it would consider any alternative proposals for the business and would weigh these up against Independence Group’s bid.
© Zephus Ltd