Golden Energy unit makes takeover bid for Stanmore Coal

A SUBSIDIARY of Singapore-listed mining company Golden Energy and Resources (Gear) has renewed a takeover attempt for Australia-listed Stanmore Coal.

Golden Investments (Australia) is making an unconditional cash offer for all the ordinary shares in Stanmore Coal it does not already own, at A$1 per share, according to a bourse filing on Thursday morning.

Stanmore Coal explores, develops, produces and sells metallurgical and thermal coal. Golden Investments is currently the largest shareholder of the coal company, with voting power of about 31.4 per cent.

The maximum cash payable by Golden Investments for the entire deal is about A$185.8 million (S$162 million), if it receives acceptances for all Stanmore Coal shares that are existing as at April 2 plus any shares issued and listed during the offer period. (see amendment note)

Petra Capital, appointed as the broker for the takeover attempt, will stand in the market on behalf of Golden Investments and accept up to 50.3 million shares starting April 2, until the offer period officially starts on April 17. If Golden Investments manages to acquire all the 50.3 million shares, its stake in Stanmore Coal will increase to about 51 per cent.

Thereafter, once the offer period commences, Petra Capital will continue to purchase Stanmore Coal shares it does not already own on-market, until the offer ends on May 18 at the close of trading on the Australia bourse.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The offer price of A$1 represents a 22 per cent premium to Stanmore Coal's closing price of A$0.82 on the Australia bourse on April 1, and a 27.3 per cent premium to the counter's 30-day volume-weighted average price to the same date.

The renewed buyout offer comes more than a year after an unsuccessful attempt to obtain a majority position. Gear's previous takeover offer for the coal company was made at A$0.95 a share in November 2018, and ended with Golden Investments holding a 25.5 per cent stake as at the offer's close in January 2019.

On Thursday, Golden Investments said the offer will allow Stanmore Coal shareholders to realise value for their shares at an "attractive premium in a challenging environment, with an uncertain time horizon for recovery".

It added that Stanmore Coal's share price has been declining since July last year as its operational and financial performance continues to deteriorate.

This share price fall has accelerated recently as a result of the impact of the coronavirus pandemic on local and global economies, Golden Investments said.

As at 1.32pm on Thursday, shares of mainboard-listed Gear were trading at 18.1 Singapore cents, down 1.6 cent or 8.1 per cent.

Amendment note: An earlier version of this article stated that the takeover offer could cost up to A$50.3 million. That figure actually refers to the total value of the 50.3 million shares the bid vehicle is looking to acquire before the offer period commences.