Westgold Resources’ takeover hopes of Gascoyne Resources have been dashed after the Supreme Court of Western Australia approved Gascoyne’s merger with Firefly Resources.
It comes after months of tussling between Westgold and Gascoyne, with the latter insistent on its ambitions to merge with Firefly rather than concede to Westgold.
Gascoyne stated its proposed business plan was set to be shaped by the integration of Firefly’s Yalgoo assets with its Dalgaranga gold mine in Western Australia.
In late October, Gascoyne indicated that while the Westgold offer would bring greater value to its shareholders if it was to go ahead, the takeover could only take place if the Firefly merger did not proceed.
With the Supreme Court’s approval of the Firefly merger, Westgold’s bid has been terminated.
“Westgold believes that it has now exhausted all possible avenues open to it to enable Gascoyne shareholders to receive the superior value offered by the Westgold offer, despite even the Gascoyne board acknowledging that Westgold’s offer was superior when compared to the Firefly scheme,” Westgold said in a statement.
Westgold executive director Wayne Bramwell said he was dismayed with the final outcome of the bid.
“Westgold is disappointed with the decision by the court to approve the Firefly scheme as we, and almost 50 per cent of Gascoyne’s shareholder base, believed that the combination of Westgold and Gascoyne would deliver a superior outcome for Gascoyne shareholders,” he said.
“We identified the opportunity to enhance the low-grade Dalgaranga operation with additional high-grade ore from our Cue assets for the benefit of both Westgold and Gascoyne shareholders, and our offer reflected that value.
“Dalgaranga is just one infrastructure option for Westgold. Now we move on and will continue to pursue a disciplined growth strategy for the benefit of all our shareholders.”
Westgold announced its off-market takeover in September, which comprised one Westgold share per four Gascoyne shares at a value of $0.44 per Gascoyne share.
In October, Gascoyne rejected Westgold’s initial offer, saying it “inadequately compensates Gascoyne shareholders in seeking to gain control of Gascoyne’s mineral resources, ore reserves and processing infrastructure.”
Soon after, Westgold increased its offer consideration to three Westgold shares for every 11 Gascoyne shares, valuing Gascoyne at $0.53 per share.
This was on the basis that Westgold obtained a relevant interest in at least 50.1 per cent of Gascoyne shares by the closing date of the offer on November 29.