Goldway Capital plans to de-list MC Mining from the JSE and from Australia after attaining over 80% control of the South Africa coal mining firm following a hostile takeover bid.
The board of MC Mining initially opposed the takeover, but Goldway swayed other shareholders in the company to accept its offer.
Goldway now controls about 83% of the former African coal company, whose shares slumped by 2.60% to R1.87 in afternoon trade yesterday despite being 7.26% stronger in the past three months.
The company yesterday confirmed that it will de-list MC Mining from the JSE and from the Australian Securities Exchange (ASX).
This has brought to an end weeks of haggling between the board of MC Mining and the US-based Goldway, which is offering A$0.16 cash per MC Mining share.
“Goldway will apply for termination of the official quotation of the MCM shares on the ASX and arrange for MCM to be removed from the official list of the ASX, as well as from its secondary listing on AIM and JSE subject to obtaining the necessary South African Reserve Bank and JSE approvals in respect of the JSE listing,” Goldway said in a supplementary bidder’s statement yesterday.
Should Goldway attain 91.08% of the former Coal of Africa entity, it “may proceed with compulsory acquisition of the outstanding MC Mining shares” and will “replace the members of the MC Mining board with nominees” of its own.
Remaining shareholders that have not yet accepted Goldway’s offer for MC Mining shares have now been advised that they face risks that include a fall in the price of the target company when the offer closes.
Non-accepting MC Mining shareholders will therefore become minority shareholders in a company controlled by Goldway, while the company’s share trading liquidity may be significantly reduced, making it difficult to sell their MC Mining stake “once the offer closes and particularly where Goldway pursues its intention to de-list” MC Mining.
Goldway’s offer for MC Mining closes on April 22.
After initial opposition to the bid by Goldway, the MC Mining board last week advised shareholders that there was “no likelihood of an alternative bid or competing proposal on more favourable terms arising in the near term”.
The MC Mining board has now advised shareholders to “consider accepting” the offer by the US company.
According to its third supplementary bidder’s statement, Goldway declared its offer “free from all defeating conditions” and highlighted that “the offer is now unconditional” and will remain open for acceptance until April 22.
Last month, the independent board committee of MC Mining “unanimously” recommended that shareholders “do not accept” the offer by Goldway after an independent expert advised that the offer was “neither fair nor reasonable” for the target company.
BDO Corporate Finance acted as the independent expert for MC Mining whose value it assessed to be between A$0.214 and A$0.356 prior to the offer by Goldway.
Based on advice from BDO Corporate Finance report, MC Mining prefers a valuation of A$0.285 per share on a controlling interest basis.
This sparked off the bitter dispute between directors in MC Mining and Goldway.
MC Mining said Goldway's statements in its second and third supplementary bidder’s statements had falsely claimed that the Vele Aluwani colliery was under care and maintenance, and that shareholders faced imminent risk of insolvency from this.
The MCM independent board committee had also challenged the valuation of the company by Goldway, saying the company was not an “independent valuation” expert as it has “vested interests” in justifying its views on appropriate valuation.
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