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 | Monday May 6, 2024 |
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Last Friday capped off an interesting few weeks at Sierra Rutile. |
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In March, the ASX-listed natural rutile producer caught a 9.5¢ low-ball bid from Gadens and Canaccord Genuity-advised commercial construction company PRM Services. The board swiftly rejected the bid, branding it as “opportunistic” and lacking an “adequate premium”, and the offer was due to expire on Friday. |
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But things have taken several turns. Samuel Terry Asset Management offloaded its entire 19.9 per cent stake to Gemcorp Commodities Asset Holdings on April 26, with the buyer picking up shares at 15¢ a pop – a whopping 58 per cent premium to the bid. Shares last traded at 12¢ (see chart below). |
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Gemcorp hasn’t made a move, yet, and it’s clear the London-based emerging markets asset manager and commodities trading house was not in Sierra Rutile’s data room, meaning they paid a big price without getting a look under the bonnet. |
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Caught by surprise, sources told Street Talk that Sierra Rutile met with its new largest shareholder on Friday to ascertain its intentions. Sierra Rutile is being advised by King & Wood Mallesons and Gresham Advisory Partners and would naturally be trying to extract a higher offer for its shareholders, with no other parties coming forward since the PRM bid. A spokesperson for Sierra Rutile declined to comment. |
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Meanwhile, other shareholders have been shifting their positions in the wake of the PRM bid. Lebanese-backed Mano Mining and Logistics, which is one of Sierra Rutile’s mining contractors and is understood to be opposed to the PRM bid, upped its stake to 11.9 per cent on April 17. Sierra Leone-controlled oil company Leonoil Group popped its head above the substantial line on April 29 and has since upped its stake to 7.5 per cent. |
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PRM, which holds 11.46 per cent of Sierra Rutile, had sought to remove four non-executive directors and replace them with its own candidates in the week following its bid, but later revoked the resolution (in part). |
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With the bid deadline fast approaching, and Poynton Stavrianou-advised Gemcorp turning up on the scene, PRM lodged an extension to its unconditional on-market takeover on April 29 stretching the offer period to July 31 – and raising eyebrows in the process, with its original notice breaching a section of the Corporations Act. It’s since received relief from the corporate regulator. |
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Street Talk is still trying to make heads or tails of the situation, but West Africa has certainly been known to throw up its share of curve calls – this might be another. |
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Read the full story tomorrow and more on the Street Talk page. |
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