Russians at war with China over Aussie gold company
The bitter battle between Russia and China for control of a Perth-based gold company has taken another twist, with the rival suitors now putting matching bids to shareholders.
Nordgold, controlled by Russian oligarch and steel
billionaire Alexey Mordashov, upped its bid for Cardinal from 90¢ a share to a
$1 a share on Wednesday, valuing Cardinal at about $538 million as gold stocks
continue to shine.
The move came hot on the heels of China’s Shandong Gold
informing Cardinal that its $1-a-share offer due to close on Friday was its
“best and final”, and could not be increased unless there was a superior offer
from Nordgold or a third party.
The Russians and Chinese are at war over Cardinal’s 5.1
million-ounce Namdini project in north-east Ghana.
The war has raged since March, when Nordgold put up a
45.7¢-a-share takeover offer after building a 19.9 per cent stake.
State-owned Shandong, China's second-biggest gold producer,
responded in June with a $300 million off-market takeover offer pitched at 60¢
a share.
Nordgold and Shandong have continued their bidding war since
then, with Nordgold increasing its stake to about 28 per cent and Shandong
holding about 12 per cent of the stock.
Cardinal shares were trading at $1.03 on Wednesday, with the
board urging shareholders to await further advice.
"Cardinal is currently considering the implications of
the increased Nordgold takeover bid in consultation with its advisers and
having regard to the provisions of the bid implementation agreement with
Shandong Gold," it said.
Cardinal backed Shandong bid
The Cardinal board had previously backed the Shandong bid,
which has received a tick of approval from the Foreign Investment Review Board.
Nordgold's offer is not due to close until November 3 and it
is determined to take control of the Namdini project, which is near some of its
existing operations in Africa.
Nordgold chief executive Nikolai Zelenski said it was
"fully committed to successfully closing its offer and to the future
success of the Namdini project".
"We are Cardinal’s largest shareholder and this
revision represents the third price increase that Nordgold has made, while
conversely Shandong has announced that it will not be increasing its price
further," he said in a statement.
Mr Zelenski said Nordgold was the best owner of Namdini,
considered one of the world's best undeveloped gold projects.
"We have a strong West African business and remain
committed to operating in the region," he said.
"Nordgold notes that it has sought and received change
of control approval from the government of Ghana, while, to the best of our
knowledge, Shandong has not sought to do so.
"In the event that Nordgold does not acquire the full
outstanding share capital of Cardinal, but remains the largest shareholder, we
stand ready to work with Cardinal management to quickly progress the Namdini
project and to provide technical and financial support to underpin its
success."
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