JOHANNESBURG (miningweekly.com) – Dual-listed Firestone Energy again on Monday advised its shareholders to reject the hostile takeover offer by ASX-listed Range River Gold.
In a statement to shareholders, Firestone CEO David Knox said the offer “remains inadequate, highly conditional and opportunistic”.
Range River was offering Firestone shareholders one of its own shares for every two Firestone shares held, which it said represented a 25% premium to the company’s closing price on December 13.
However, Firestone said on Monday that an independent expert, Deloitte Corporate Finance, had concluded that the takeover offer was unfair and unreasonable to shareholders and did not compensate Firestone shareholders for the strategic nature and inherent value of the coal miner’s assets.
“Range River’s offer has been timed opportunistically to coincide with the settlement of the Ariona transaction; designed to destabilise and distract Firestone; and transfer the value in Firestone to Range River at a time just prior to Firestone achieving critical milestone events,” Firestone noted.
The coal miner had, in recent weeks, requested several trading halts on the JSE and the ASX, as it continued to try to conclude a A$12.5-million investment agreement with Ariona.
Firestone also pointed out that the offer remained conditional on Range River acquiring Ariona Company, raising $10-million through an equity raising, raising $10-million through a convertible loan and securing $35-million of funding through a Standard Bank South Africa consortium.
Further, the company said Range River was paying a significantly higher price to black economic-empowerment partner, Sekoko Resources, to acquire its interest in Firestone.
In addition, Firestone believed the offer would dilute existing shareholders’ ownership in the company’s assets and may have adverse tax implications for Firestone shareholders.