THE $68 million acquisition of Meridian Minerals by its major shareholder Northwest Nonferrous Australia Mining has been approved.
According to a report by the ASX on September 28, the Foreign Investment Review Board has endorsed Northwest’s bid to acquire 100 per cent of Meridian. Meridian managing director Jeremy Read said the company was pleased to receive the notification.
“[It] is one further positive step completed towards the acquisition of the company by Northwest,” Mr Read said. On September 21, Meridian announced it had signed a Scheme Implementation
Agreement with Northwest Nonferrous International Investment Company and its wholly-owned subsidiary, Northwest Nonferrous Australia Mining.
Assuming the conditions of the scheme are satisfied, Northwest will pay Meridian shareholders a cash consideration of $0.14 per share to secure the remaining 58.6 per cent of the company. The $0.14 per share
price tag represents a 22 per cent premium to Meridian’s closing price of 10.5 cents on August 18, and a 30 per cent premium to Meridian’s volume weighted average price since July 19.
The Meridian board of directors unanimously supported the bid, in the absence of any superior proposal and subject to an independent expert’s opinion. The scheme is dependent on several regulatory approvals and other conditions.
These include receiving any necessary approvals from the Chinese Government, Meridian shareholders and the court. An independent expert must also conclude that the scheme is in the best interest of Meridian’s shareholders, who are expected to meet in November to approve the deal. Following shareholder and court approval, the scheme is expected to be implemented in early to mid-December. Just two years ago, Meridian’s share price traded at $0.02 with a market capitalisation of $1.5 million.
“The board believes the agreement we have reached with Northwest will allow Meridian shareholders to capture the significant share price appreciation we have seen over the past two years,” Mr Read said.
By Kate Christou