Norton Gold Fields’ $24 million takeover bid for Bullabulling Gold remains under pressure after the target company revealed shareholders with 41.8 per cent of its shares had indicated they would not accept the 7c-a-share offer.
The cash offer also remains overbid on the market, with Bullabulling closing yesterday at 7.5c.
But Bullabulling has nevertheless felt the need to warn shareholders that the 7c bid could be just the first step in a potential two-step play by Norton — majority owned by China’s biggest gold producer Zijin — to secure control of the company and its 3.75 million ounce gold resource, 60km from Kalgoorlie.
Because the Norton offer is not subject to a minimum acceptance condition, and because of the shareholders who have indicated that they would not accept for their collective 41.8 per cent stake, Bullabulling believes it is possible Norton could return in the future with a separate, follow-on offer in order to acquire 100 per cent control.
Bullabulling said it could well be that any such offer would be at a higher price than the 7c bid.
The company repeated previous advice that the current offer does not fairly reflect the value of the Bullabulling gold project, and is opportunistic as it comes before the release of a definitive feasibility study, due in the first quarter of next year.
It said the study was expected to “reveal further improvement in the Bullabulling gold project’s development plan and economics.’’
The Norton bid was at a 30 per cent premium to Bullabulling’s share price before the offer was announced. Norton has argued the offer gives certainty in that Bullabulling will have to jump a capital hurdle to get its project in to production, Norton put the capital needs at more than $300m.