At the time of writing, shares of Explaurum Ltd [ASX:EXU] are up by 41.89% at time of writing to 10.5 cents per share.
Why did Explaurum Ltd shares do this?
Explaurum Ltd received a takeover offer from Ramelius Resources Limited [ASX:RMS] today. Ramelius is offering shares (no cash) to Explaurum shareholders. The offer ― subject to a number of conditions ― implies a valuation of roughly 12.3 cents per share.
What now for Explaurum Ltd?
Explaurum Ltd’s directors rejected the offer, stating (with my emphasis added):
‘…at Ramelius’ request, the Explaurum Board met with senior Ramelius executives last week to better understand Ramelius’ proposal and to explore the potential benefits of a merger for Explaurum and Ramelius shareholders. Ramelius declined to provide meaningful information and the meeting participants agreed that those discussions would continue. Accordingly, Explaurum is surprised and disappointed that Ramelius has proceeded with its announcement before completing any meaningful engagement.’
Explaurum Ltd’s directors stated the offer was inadequate and ill-timed, given the recent bankable feasibility results for the Tampia gold project. Here’s a snap-shot of the company and opportunity on offer:
Source: Explaurum Ltd
The bottom line: it’s certainly an exciting time for the company. In my decade-plus experience in the equities markets, a takeover offer can be the start of something bigger. There’s no guarantee this will happen. But ― at the very least ― this takeover offer has officially put the spot light on Explaurum Ltd. Ramelius Resources boasts a roughly $230 million market capitalisation and ― no doubt ― is looking for the easiest and quickest way to get to the $1 billion mark.
Resources Analyst, Markets & Money
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