UCL Resources Limited (UCL) is pleased to announce its offer to acquire all shares in Minemakers Limited (MAK), by way of an off-market takeover bid. Each company currently has a 42.5% stake in the Sandpiper Marine Phosphate Project (“Sandpiper” or the “Project”), and each company recognises the importance of having a single entity to facilitate financing this Project.
Accordingly, under the offer MAK shareholders will receive:
- 1 UCL share for every 1.6 MAK shares held; plus
- 4.5 cents cash for each MAK share held (the “Offer”).
This merger Offer implies a value of A$0.208 per MAK share and represents a 6.4% premium to the closing price of MAK shares on Thursday, 17 May 2012.
The UCL Board believes that the Offer is compelling for MAK shareholders and notes the following:
- Financial terms of the Offer are superior to the terms implied by MAK’s own offer to UCL shareholders;
- The Offer will allow MAK shareholders to benefit from an exchange of their MAK shares for UCL shares plus cash consideration. The UCL Board notes that MAK has not to date delivered a dividend to MAK shareholders. The UCL Board believes that if the Offer is successful, prospective commercial development of Sandpiper may be accelerated and the payment of dividends from Sandpiper cash flows may result;
- Under the Offer the interests of both MAK and UCL Shareholders in Sandpiper will remain close to current levels;
- The Offer will allow MAK and UCL to achieve their shared objective of combining the ownership of Sandpiper;
UCL believes financing is critical to the value in Sandpiper being unlocked. The Offer will allow MAK Shareholders to benefit from the relationships that UCL has developed with strategic investors prepared to support UCL’s Board and management team in commercialising Sandpiper. UCL has a proven track record in attracting major strategic investors, and is well advanced in attracting additional equity.
The Definitive Feasibility Study (“DFS”), published in April 2012 confirmed Sandpiper is both technically feasible and has the potential to be a long life project capable of delivering strong investment returns to shareholders of both MAK and UCL. The study indicates that the funding requirement to develop Sandpiper is in excess of US$400 million. UCL is confident in its ability to source funding for the Project and that the synergies resulting from the combined entity under UCL’s Offer will facilitate the rapid development of Sandpiper to the benefit of the shareholders in both companies.