ANNOUNCEMENT
15 February 2024
OFF-MARKET TAKEOVER BID -
PRELIMINARY VIEW - DO NOT ACCEPT THE OFFER
MC Mining Limited (MC Mining or the Company) provides the following update
in relation to the off-market takeover bid by Goldway Capital
Investment Limited (Goldway) for all of the fully paid
ordinary shares on issue in the Company that the consortium of
joint-bidders currently do not own for a cash price of A$0.16 cash
per share (Takeover
Offer).
Executive Summary
·
DO NOT
ACCEPT: The preliminary
recommendation of MC Mining's Independent Board Committee
(IBC) is that shareholders
DO NOT ACCEPT the Takeover
Offer from Goldway.
·
OPPORTUNISTIC: The IBC is
of the view that the Takeover Offer is opportunistic, does not
provide an appropriate premium for control and does not appear to
attribute adequate value to MC Mining's assets and
projects.
·
MINIMUM
ACCEPTANCE CONDITION: The Takeover
Offer is subject to a minimum acceptance condition (which cannot be
waived) that Goldway receives acceptances in respect of at
least 50.1% of the shares not held by
Goldway and the joint bidders (Bidder Parties). In practical terms,
this means that the Bidder Parties must be interested in or acquire
relevant interests in at least 82.19% of the total shares on issue
(not 75%) before (i) any offer consideration will be paid to any MC
Mining Shareholders who have accepted the Takeover Offer and (ii)
before Goldway can act upon any intention to delist MC Mining from
trading on any and all of the Company's public market
exchanges.
Refer to the below Schedule for further details in
relation to the above summary.
Full details of the IBC's formal
recommendation and reasons will be included in MC Mining's Target
Statement, which will include the independent expert's report as to
whether in the expert's opinion, the
Takeover Offer is fair and reasonable and the expert's reasons for
forming that opinion.
The IBC look forward to your
continuing support as we respond to the Takeover Offer.
Khomotso Mosehla
Chairman of the IBC
This announcement has been approved
for release by the Company's Disclosure Committee.
For
more information contact:
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Tony Bevan
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Company Secretary
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Endeavour Corporate
Services
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+61 42 1072 165
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Company advisers:
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Richard Johnson / Rob
Patrick
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Nominated Adviser
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Strand Hanson Limited
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+44 20 7409 3494
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Rory Scott
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Broker (AIM)
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Tennyson Securities
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+44 20 7186 9031
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Marion Brower
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Financial PR (South
Africa)
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R&A Strategic
Communications
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+27 11 880 3924
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BSM Sponsors Proprietary Limited is
the nominated JSE Sponsor
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About MC Mining Limited:
MC Mining is an AIM/ASX/JSE-listed
coal exploration, development and mining company operating in South
Africa. MC Mining's key projects include the Uitkomst Colliery
(metallurgical and thermal coal), Makhado Project (hard coking
coal), Vele Colliery (semi-soft coking and thermal coal), and the
Greater Soutpansberg Projects (coking and thermal coal).
Schedule
After careful consideration of the
Takeover Offer provided in the Bidder's Statement dated 2 February
2024 (as supplemented by the First Supplementary Bidder's Statement
dated 15 February 2024), the IBC's preliminary recommendation is
that shareholders DO NOT
ACCEPT the Takeover Offer from Goldway of A$0.16 cash per
share.
You will shortly be receiving
Goldway's formal offer document, called a Bidder's Statement (being
the original Bidder's Statement dated 2 February 2024 and the First
Supplementary Bidder's Statement). This will be followed by the
Target's Statement, which will be the IBC's formal response to the
Takeover Offer.
To NOT ACCEPT the Takeover Offer simply
DO NOTHING and take
NO ACTION in relation to
all documents sent to you by Goldway.
The IBC's initial view and reasons
why the IBC believe the Takeover Offer should not be accepted are
that the A$0.16 Takeover Offer from Goldway:
·
is opportunistic and appears to be timed to take
advantage of the updated Life of Mine plan and improved production
and Coal Reserves estimates for the shovel-ready Makhado
steelmaking hard coking coal project;
·
does not provide an adequate premium for control
and falls below the average premium for a typical change of control
transaction; and
·
appears to attribute little or no value to MC
Mining's portfolio of exploration assets and development
projects.
The Target Statement will set out
full particulars and reasons for the IBC's views and
recommendation.
Importantly, the IBC would also like
to draw shareholders attention to key conditions of the relief
received by the Bidder Parties from the Australian Securities &
Investments Commission (ASIC) under section 655A of the
Corporations Act to permit them to make an off-market takeover bid
for issued ordinary shares in MC Mining without contravening
section 606 of the Corporations Act (ASIC Relief Instrument). A
summary of the key conditions are provided below:
(a) a minimum acceptance
condition that Goldway receives acceptances in respect of 50.1% or
more of shares in which neither Goldway, a consortium joint-bidder
or any associate has a relevant interest in at the commencement of
the Takeover Offer period. This defeating condition cannot be
waived;
(b) if the above acceptance
condition is not met by the end of the offer period (including any
extended offer period), all contracts from acceptances are
rescinded and no cash consideration can be paid to those
shareholders who originally accepted; and
(c) if before the end of
the Takeover Offer period, a person not associated with the Bidder
Parties makes or varies a takeover offer for all shares in MC
Mining and the following conditions are satisfied:
i. the
consideration offered under the rival bid is more than (or becomes
more than) 105% of the value of the consideration offered under
Goldway's Takeover Offer (as assessed by ASIC and notified to the
Bidder Parties if the consideration offered under the rival bid is
other than cash or is a combination of cash and other-than-cash
consideration);
ii. the
rival bid is or has become unconditional except for prescribed
occurrence conditions (being events or circumstances referred to in
subsections 652C(1) or (2) of the Corporations Act); and
iii.
where the rival bid is a takeover bid, the offer
period starts before the end of the Takeover Offer period
(Rival
Bid), then within seven days from the date that all of the
above conditions are satisfied, Goldway must increase the value of
its Takeover Offer price to a value that is equal to, or higher
than (as assessed by ASIC), the consideration offered under a Rival
Bid, otherwise the Bidder Parties will be required to accept the
offers made under the Rival Bid in respect of all the MC Mining
shares in which the Bidder Parties have a relevant interest by that
time.
The IBC would also like to clarify
an initial statement made in the Bidder's Statement received from
Goldway dated 2 February 2024. In the letter to MC Mining
shareholders, the Bidder Parties outline their intention to delist
MC Mining from the official lists of the ASX and the JSE and to cancel from trading
on AIM if, following completion of the Takeover Offer, the Bidder
Parties together own or control at least 75% of the issued shares
in MC Mining. Due to the minimum acceptance condition of 50.1% of
non-associated shareholders outlined in the ASIC Relief Instrument,
and given that the Bidder Parties represent, in aggregate, 64.3% of
the issued capital in MC Mining, the Bidder Parties would require a
combined relevant interest in MC Mining of at least 82.19% to
affect a takeover and apply to delist the Company, subject to
obtaining the necessary South African Reserve Bank approval in
respect of the JSE listing.
As noted above, further details of
IBC's formal recommendation will be provided in the Target's
Statement. A copy will also be available on the ASX website,
www.asx.com.au,
and MC Mining's website, www.mcmining.co.za, as will news of any
other developments in relation to the Offer.
Should you have any queries
regarding the Takeover Offer and Bidder's Statement, please contact
Tony Bevan, the Company Secretary, on tonyb@westozcorporate.com.au.
A copy of the Bidder's Statement can be viewed on the Company's
website.