Diatreme Resources Extends Takeover Offer for Metallica Minerals
DRX (DRX) Share Update July 2024 Tuesday 23rd
Diatreme Extends Takeover Offer for Metallica Minerals
Diatreme Resources Limited (ASX: DRX) has announced an extension of its unconditional takeover offer for Metallica Minerals Limited (ASX: MLM). The offer, which was initially set to close earlier, will now remain open until August 6, 2024.
Instant Summary:
- Diatreme extends the offer period to August 6, 2024.
- Metallica shareholders encouraged to accept the offer promptly.
- Diatreme's interest in Metallica has increased to 87.05%.
- Compulsory acquisition will proceed if Diatreme reaches 90% interest.
- Shareholders accepting the offer will receive consideration within 10 business days.
Offer Extension and Encouragement to Shareholders
Diatreme Resources Limited has extended its off-market takeover bid for all ordinary shares in Metallica Minerals Limited. The new closing date for the offer is August 6, 2024. Diatreme emphasizes the importance for Metallica shareholders to accept the offer promptly to benefit from the offer's terms.
Shareholders who accept the offer before the closing date will receive their consideration within 10 business days, significantly faster than through the compulsory acquisition process. If Diatreme reaches a 90% relevant interest, it intends to proceed with compulsory acquisition of any remaining Metallica shares.
Diatreme's Current Position and Future Plans
As of the announcement date, Diatreme holds an 87.05% interest in Metallica. The company aims to reach a 90% interest, which would allow it to compulsorily acquire the remaining shares and delist Metallica from the ASX. This process is expected to take at least six weeks after Diatreme issues the compulsory acquisition notice.
Metallica shareholders who do not accept the offer before the closing date will have to wait for the completion of the compulsory acquisition process to receive their consideration, which will be delayed compared to those who accept the offer promptly.
How to Accept the Offer
Metallica shareholders can accept the offer by returning their acceptance form or contacting their controlling participant, usually their broker. Online acceptance is also available through the Automic Share Registry website.
For any questions regarding the offer, shareholders can contact the Metallica Offer Information Line or consult their legal, financial, or other professional advisers.
The extension of the takeover offer and the potential for compulsory acquisition are significant developments for both Diatreme and Metallica shareholders. Diatreme's increased interest in Metallica and the possibility of compulsory acquisition suggest a strong strategic move to consolidate its position. This could positively impact Diatreme's stock as it gains control over Metallica's assets and operations.
However, the delay in receiving consideration for those who do not accept the offer promptly could create uncertainty and potential dissatisfaction among Metallica shareholders. Investors should consider the timing and benefits of accepting the offer versus waiting for the compulsory acquisition process to conclude.
Investor Reaction:
Investor reactions have been mixed. Some analysts view Diatreme's move as a strategic consolidation that could strengthen its market position. Others express concerns about the timing and potential delays in receiving consideration for Metallica shareholders who do not accept the offer promptly.
Conclusion:
Investors should carefully evaluate the benefits of accepting Diatreme's offer before the closing date. The potential for a faster consideration process and the strategic implications of Diatreme's increased interest in Metallica make this an important decision. Stay informed and consider consulting with financial advisers to make the best choice for your portfolio.