Phoenix Gold’s (ASX:PXG) directors have unanimously recommended in its Target’s Statement that shareholders reject the takeover offer from its largest shareholder Evolution Mining (ASX:EVN).
Evolution is offering 0.06 EVN shares and $0.06 cash, at a headline price of $0.12 per PXG share or at an implied value of $0.1294 per PXG share using EVN’s 20-day volume weighted average price.
The board said the offer is substantially below the $0.156 to $0.244 value of a PXG share ascribed by an independent expert for the purpose of assessing the recent offer from Zijin Mining Group Co., Ltd (SHA:601899, HKG:2899), which was also rejected.
Other reasons for rejecting the offer are:
- Accepting the Evolution offer will diminish exposure to any potential increase in value that the Phoenix assets offer;
- The Phoenix assets carry significant strategic value for Evolution following Evolution’s recent asset acquisitions in the region, which is not fully reflected in the Evolution Offer;
- Accepting the offer would result in PXG shareholders having only a very small proportion of the total Evolution Shares on issue; and
- The value of any future dividend entitlements as an EVN shareholder is likely to be immaterial.
Each of Phoenix’s directors who holds or controls PXG shares intends to reject the Evolution offer in relation to those shares.
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