On the morning of 15th, Cardinal Resources announced that some of the company's directors had accepted the updated purchase price of Shandong Gold, and about 6.07% of the shares would be transferred to Shandong Gold through off-market transfers.
This means that Shandong Gold and Russian gold miner Nordgold have entered the final stage of competition for the acquisition of the company. On September 7, Shandong Gold updated its over-the-counter offer for Catino to A$1 per share, which was higher than the offer of 0.9 A$/share of the rival Nordgold. The price is more than twice as high as the first price offered by Shanjin.
Prior to this, the subscription transaction for Shandong Gold Hong Kong to subscribe for 26 million shares of the target company at a price of 0.46 Australian dollars per share was completed on July 7. The total subscription price was 11.96 million Australian dollars, accounting for 4.94% of the target company’s issued share capital. After the transfer, Shanjin's shareholding increased to 11.01%.
Nordgold has now announced that it will extend the offer period to the closing time of the ASX on September 24, 2020. As of September 2, 2020, Nordgold owns 28.39% of the issued common shares of Cardino Resources and has not sold or acquired any common shares since September 2. Nordgold said that if it is unable to successfully acquire more than 50% of the common stock, it may consider seeking further appointments to the board of directors of Catino, and may seek further purchases of common stock in accordance with applicable laws and stock exchange rules in the future. If more than 50% of the common stock is acquired but less than 90%, it intends to continue Cardino’s operations and maintain its listing status, and appoint directors and members based on the share ratio. If more than 90% of the common shares are acquired, it may seek to purchase further common shares or exercise mandatory purchase rights.
In other words, Nordgold said that the stocks in his hand will not be bought, so what to do. However, it is unknown whether it will continue to compete with Shandong Gold for price-increasing acquisitions.
At present, for Shanjin, as a white knight, it is very important to get the support of Catino's board of directors. The next step can also be to consider the appointment of company directors, but the strategy of off-market acquisitions also limits its overall acquisition intentions. Acquiring the holding in time, and in extreme cases, will face the influence of Nordgold, the second shareholder, and it will cost a lot of money to clear it out.
In fact, there are many joint ventures between the two giants of gold projects. Shanjin also has a 50% to 50% joint venture with Barrick. Rather than compete with the Russians, it is better to live together.
