PERTH (miningweekly.com) – Suitor Middle Island Resources has warned that a defeating condition has been triggered for its takeover offer of fellow-listed Alto Metals, after Alto announced a capital raise earlier this month.
Alto has previously said that it would raise A$600 000 through a share placement to Alto chairperson Terry Wheeler, as part of a larger A$2.6-million capital raise, allowing Wheeler to maintain his interest in the company.
The issue of 16.7-million shares and 8.3-million options to Wheeler is subject to shareholder approval.
However, Middle Island on Wednesday said that the issue of the additional securities to Wheeler would trigger a defeating condition of it’s A$9.4-million share bid for Alto, under which Middle Island is offering five of its own shares for every one Alto shares held.
Middle Island has not waived the breach of the defeating condition, reserving its right to rely on the trigger to allow the offer to lapse, or to apply to the Australian Securities and Investment Commission for consent to withdraw the offer.
Alto has previously urged shareholders to reject the takeover offer from Middle Island, with the company’s major shareholders, who hold a combined 25.37% interest in Alto, saying they would not accept the offer.
Alto told shareholders that the takeover offer failed to recognise the company’s unrealised potential, and offered little benefit to Alto’s shareholders.
Alto has also stated its belief that the takeover offer from Middle Island would only be the first attempt by this company to gain control of Alto, citing its reduction in the minimum acceptance from 90% to 50.1%.