In announcing its off-market takeover offer for New Century Resources was open on Tuesday, Sibanye-Stillwater affirmed its dominion over the zinc miner.
Sibanye-Stillwater has boosted its New Century shareholding from 19.9 per cent to more than 70 per cent in the weeks since announcing the takeover bid, which it said makes any competing proposal unlikely.
The offer involves the South African miner owning 100 per cent of New Century at a price of $1.10 per share, representing a 42.9 per cent premium to New Century’s closing share price on February 20 – the last trading day before the offer was announced.
After initially recommending its shareholders to take no action regarding Sibanye’s offer, New Century said on Wednesday that it unanimously recommended its shareholders accept the offer.
In recommending the offer be accepted by its shareholders, New Century said it was uncertain as to whether Sibanye would reach the 90 per cent ownership threshold to compulsorily acquire all shares in New Century.
If it doesn’t achieve compulsory acquisition, New Century said Sibanye intends to cause New Century to apply for removal from the ASX, and that any remaining New Century shareholders would likely face significantly reduced liquidity once the Sibanye offer has expired.
New Century shareholders “may have difficulty realising a price equivalent to the price offered under the Sibanye offer or current market prices”, the company said.
Sibanye-Stillwater launched its takeover bid as it had been “concerned about the change in the strategic direction” of New Century under current management, citing New Century’s move away from building a tailings management services business.
“The substantial decline in shareholder value (with the New Century share price down 59 per cent over the last six months) implies that the current strategy has not been well received by shareholders and investors,” Sibanye-Stillwater said.
Subscribe to Australian Resources & Investment and receive the latest news on commodity prices, resource developments, executive movements and more.