INDEPENDENCE Group (ASX: IGO) has launched a $312m takeover bid for Panoramic Resources (ASX: PAN).
IGO said the hostile all-scrip bid was taken to shareholders after a number of attempts to engage with the board for a friendly takeover were unsuccessful.
The company cited poor performance and a “lack of engagement from the Panoramic board” as the reason for backing the takeover.
“The offer represents, in IGO’s view, the best opportunity for Panoramic’s shareholders to crystalise and de-risk meaningful value from their investment in Panoramic in the foreseeable future,” it said.
The offer would pay a premium 42pc to the last closing price of Panoramic shares before the date of the bidder’s statement, and 51pc to the one-month VWAP.
Under the offer, shareholders would receive one IGO share for every 13 Panoramic shares, which values each Panoramic share at $0.476c.
The company said that there would also be an opportunity for capital gains tax scrip for scrip rollover relief.
The takeover would be in line with IGO’s strategy to increase its production of nickel, and the company said that it would leverage its capabilities and expertise to maximise value from Savannah.
This comes just days after IGO finalised offtake agreements with BHP and Nickel West at the Nova mine in WA, including the completion of concentrate tendering processes and the downstream nickel sulphate pre-feasibility study.
Panoramic is currently developing the Savannah nickel mine in WA, and has a substantial exploration portfolio in the Kimberley.
The Savannah operation is a 217kt nickel mineral resource, with a 110kt nickel ore reserve. It averages about 10.8ktpa and has a mine life of about eight years.
Panoramic Resources has urged its shareholders to take no action in what it called an “unsolicited, highly conditional scrip takeover offer”.
IGO managing director Peter Bradford said that it was an opportunity that would be mutually beneficial for shareholders of both companies.
“Panoramic shareholders will be able to crystallise future value from Savannah at a very attractive price and retain exposure to its upside potential, while also gaining exposure to Nova and Tropicana and Independence Group’s extensive portfolio of belt-scale exploration projects prospective for nickel and copper,” he said.
“The company remains leveraged to the nickel market and we believe Independence has the financial, operational and technical capability to fully unlock value from Savannah and Panoramic’s exploration portfolio.”
