Cardinal Resources’ (TSX: CDV) board of directors has urged shareholders to accept a revised off-market takeover proposal made by Shandong Gold.
China’s second-largest gold producer on Monday increased its offer price for Cardinal from 70c a share to A$1 a share, outbidding Russian gold miner Nordgold, which had increased its own offer from 60c a share to 90c a share.
Nordgold, whose non-executive chairman is billionaire Alexey Mordashov, is currently Cardinal’s largest shareholder with a voting power of almost 19%.
“The Cardinal Board carefully considered the improved Shandong Gold offer in detail and given the superior price to the Nordgold takeover bid, the Board unanimously recommends that Cardinal Shareholders accept Shandong offer” the company said in a press release.
“The recommended improved offer of A$1.00 cash per share values Cardinal at approximately A$565.6 million ($408 million) on a fully diluted basis and represents an attractive premium of approximately 11.1% to the revised Nordgold Takeover Bid of A$0.90 cash per share.”
Cardinal holds an interest in a number of tenements within Ghana. The company is currently focusing on the development of its Namindi project, which has an ore reserve of approximately 5.1 million ounces.
Nordgold, which acquired many of its major assets during the 2008-2009 financial crisis, owns several gold mines in Africa, including Bissa in Burkina Faso and Lefa in Guinea. It also operates in Russia and Kazakhstan.
Shares of Cardinal Resources were up 6.5% on the TSX by midday Tuesday. The company has a C$496 million market capitalization.
Cardinal Resources’ stock also closed 2.94% higher on the ASX Tuesday, with a market value of approximately A$552 million.