The Cardinal Resources Ltd (ASX: CDV) share price is surging higher today on news the company has received an unsolicited takeover bid. The conditional, off‐market takeover offer at $1.05 per share is from a Ghana incorporated company, and is the third takeover bid Cardinal has received this year.
At the time of writing, the Cardinal share price has lifted higher than the actual offer price, up 5.94% to $1.07.
What happened today
Mineral explorer Cardinal says it received a bid of $1.05 per share in the form of cash from Engineers & Planners Company Limited, a company incorporated in Ghana.
The bidder’s statement advised the offer was conditional upon 50.1% minimum acceptance by Cardinal shareholders, as well as regulatory approvals. These approvals include the Foreign Investment Review Board in Australia, as well as approvals in Ghana by the relevant authorities.
Cardinal has advised its shareholders to take no action at this time while the board considers the proposal.
Other recent takeover bids for Cardinal
Earlier in the year, Cardinal was embroiled in a takeover battle for the company by two overseas-based miners – Shandong Gold (SHA: 600547) from China, and Russian company Nord Gold.
In June, Cardinal received a takeover bid from Hong Kong-based Shandong Gold at an offer price of 60 cents per share, valuing the company at around $300 million. The Chinese company, which is the second-largest gold producer in China, then increased its offer price for Cardinal to $1 a share in September. This was meant to outbid another interested party Nordgold, a Russian gold miner which had previously increased its own offer from 60 cents to 90 cents a share.
Today’s price of $1.05 represents a 5% premium to the last offer price from Shandong Gold of $1, which the board at the time unanimously recommended shareholders to accept.
About Cardinal Resources
Cardinal is a West African gold‐focused exploration and mining company that holds interests in tenements within Ghana, West Africa. The company is focused on the development of the Namdini Gold Project, and released its feasibility study on 28 October 2019 which concluded that it had an ore reserve of approximately 5.1 million ounces.
The Cardinal share price has more than doubled in 2020. It began the year at 31 cents before rising to today’s price of $1.07. The company currently commands a market cap of $575 million.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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