TIO (NZ) Limited, a wholly-owned subsidiary of The Todd Corporation Limited, has announced an unconditional all cash off market takeover bid to acquire all of the ordinary shares in Flinders Mines Limited. The offer price of 1.3 cents per ordinary share, values the bid at $38.15 million.
The offer price is more than two and a half times the price of $0.005 per share at which Flinders issued shares under the share placement announced on March 2, 2016.
This represents a premium of 63% to the closing price on the ASX on March 16 of $0.008 per share; 71% to the 30 day VWAP of $0.0076 per share; and 66% to the 60 day VWAP of $0.0078 per share.
TIO director Michael Wolley said, “The all-cash offer provides shareholders with a compelling opportunity to sell for cash and to avoid the future risks and costs of the Pilbara Iron Ore Project (PIOP). PIOP does not currently have a transportation solution to get its ore to port and on to market.
"Despite the recent share placement, TIO is of the view that Flinders is likely to need to source additional funding in the near to medium term even if no progress is made on the development of PIOP.
"Further, significant funding will be needed to determine if there is an economical pathway to develop PIOP. Following this, if the project were to proceed, substantial funding would be needed to construct the mine. An independent expert’s report prepared for Flinders in July 2015 assumed that a 25 million tonnes per annum mine would cost $800 million.
"If Flinders chooses to raise equity to provide further funding, existing Flinders shareholders will need to participate or be diluted. TIO is seeking to increase its shareholding in Flinders to at least a level where it can better influence the future direction of Flinders and the evaluation of the future development options for PIOP.”
Following TIO's announcement Flinders Mines issued a statement advising shareholders to take no action following the takeover bid by TIO.
"Directors are considering the TIO offer and shareholders are advised to take no action until they receive a recommendation from the Directors of Flinders."
Flinders Mines currently has 2,934,648,754 ordinary shares on issue.