The Independent Board Committee (IBC) of MC Mining, a company listed on the Johannesburg Stock Exchange (JSE), Australian Securities Exchange (ASX), and Alternative Investment Market (AIM), has voiced its dissatisfaction over Goldway Capital Investment’s decision to prolong the takeover offer period until April 19, 2024. This move comes after the Australian Securities and Investments Commission (ASIC) allowed Goldway a two-week extension beyond the original deadline of April 5. Goldway had made a bid in January to acquire all shares of MC Mining not already under its control, offering A$0.16 per share off-market, aiming to consolidate its holdings.
The takeover bid by Goldway, which encompasses major shareholders such as Senosi Group Investment Holdings and Dendocept, aims to increase its stake in MC Mining beyond the current 76.4%. However, this falls short of the 82.19% threshold required for the offer’s minimum acceptance condition. The extension of the offer period has been interpreted by the IBC as an attempt to unduly pressure minority shareholders into acceptance, particularly after Goldway had previously indicated that the offer period would not be extended, a stance that the IBC now views as reneged.
Despite the accumulation of acceptances from shareholders representing 12.1% of MC Mining’s issued shares (equating to only 34% of the target shares), the IBC remains firm in its recommendation for shareholders to reject the offer. This stance is fortified by an independent valuation conducted by BDO Corporate Finance, which starkly contrasts Goldway’s bid, valuing MC Mining’s shares significantly higher—at a minimum of A$0.21 and potentially up to A$0.35 per share. The IBC is particularly aggrieved by what it sees as Goldway’s opportunistic extension, viewing it as a breach of faith regarding prior assurances to shareholders that the offer represented their “best and final” bid.
The IBC’s frustration is rooted not just in the perceived undervaluation of MC Mining’s shares but also in the broader implications for shareholder rights and corporate governance. The committee is concerned that Goldway’s actions might set a concerning precedent for takeover bids, where offers can be extended in ways that might unduly influence shareholder decisions. This concern is amplified by the independent assessment from BDO, which suggests that the offer significantly undervalues MC Mining, potentially disadvantaging shareholders who might be swayed into accepting under the revised terms.
This unfolding scenario raises critical questions about the valuation of companies in the resources sector, shareholder rights, and the mechanisms of corporate takeovers. The extension of the offer period by Goldway, despite previous commitments, has been met with disappointment and skepticism by the IBC, which remains committed to safeguarding shareholder interests against what it perceives as opportunistic and potentially coercive acquisition tactics. The committee’s resistance to the takeover bid underscores a broader narrative of conflict between corporate strategy and shareholder interests, where valuation disputes and takeover tactics come to the forefront of corporate governance discussions.
As the situation develops, stakeholders within and beyond MC Mining will closely watch how these tensions between the IBC’s protective stance and Goldway’s acquisition ambitions resolve. The outcome of this takeover bid will not only determine the ownership and strategic direction of MC Mining but also contribute to the ongoing discourse on fair valuation, shareholder rights, and the ethical conduct of corporate takeovers within the global financial markets.
Source: Mining Weekly
