Highlights:
- Paladin announces an off-market takeover offer for the shares in Summit it does not presently own
- Consideration of one (1) new Paladin share for every one (1) Summit share held
- Paladin currently holds 82.08% of the ordinary shares in Summit
- If successful, Offer would result in approximately 39.1M new Paladin shares being issued to third-party shareholders representing approximately 2.28% of Paladin’s shares outstanding
- The Offer consideration is final and will not be increased1
- Summit’s Independent Directors unanimously recommend the Offer (in the absence of a superior offer and subject to the independent expert not concluding that the Offer is not fair and not reasonable
- The Offer is being made in line with Paladin’s continued cost optimisation initiatives – If the Offer succeeds, will result in reduced compliance and regulatory costs associated with having a Paladin majority-owned subsidiary separately listed
- Paladin encourages Summit third-party shareholders to accept in light of the opportunity to exchange for shares in Paladin, a larger, more comprehensive, more liquid uranium company
Paladin Energy Limited (Paladin or the Company) (ASX:PDN) announces the execution of a Bid Implementation Agreement (BIA) under which it is proposed that Paladin will acquire all of the issued shares of Summit Resources Limited (Summit) (ASX: SMM) that it does not presently own, on a scrip for scrip basis by way of a recommended off-market conditional takeover offer (Offer). The BIA will be released to the ASX at the same time as this announcement.
Under the Offer, third-party Summit shareholders will receive one new Paladin share for every one Summit share held. Based on Paladin’s closing share price of A$0.20 on the ASX on 31 July 2018, the offer values each Summit share at A$0.20.
The Offer is unanimously recommended by the independent directors of Summit who have also agreed to acceptPaladin’sOfferinrespectofallsharestheycontrol, in each case in the absence of a superior offer and subject to the independent expert not concluding that the Offer is not fair and not reasonable.
Summit has engaged BDO Corporate Finance (WA) Pty Ltd to prepare an independent expert’s report on whether the Offer is fair and reasonable to shareholders (IER). The IER will be provided to Summit shareholders with the Target’s Statement.
Strategic Rationale for the Transaction
Paladin makes the Offer for Summit in line with its continued cost optimisation initiatives. The Company already owns 82.08% of Summit and by purchasing the shares owned by third-party shareholders and de-listing Summit, cost savings can be achieved in the areas of compliance and regulatory costs.
Paladin believes Summit’s third-party shareholders will benefit from accepting the offer in that theywill exchange their Summit shares into shares in the Company providing the ownership of a larger, more comprehensive and more liquid uranium entity. Furthermore, Paladin believes Summit on a standalone basis carries funding risk given its limited available cash and uncertainty as to how it may fund its operations going forward.
Transaction Details
The Offer will be implemented by way of an off-market takeover offer under the Australian Corporations Act. Paladin will offer one new Paladin share for every one Summit share.
The Offer is subject to the satisfaction or waiver of the conditions in Schedule 2 of the BIA, and which are summarised below:
- Paladin acquiring a relevant interest in more than 90% of all Summit shares on issue, and at least 75%oftheSummitsharesthatPaladinisofferingtoacquireundertheOffer;
- no material adverse change (as defined in the BIA) occurring in relation to Summit during the offer period;
- no prescribed occurrence (as defined in the BIA) occurring in relation to Summit during the offer period; and
- no material litigation being threatened or commenced against Summit during the offer period EachoftheconditionscanbewaivedinPaladin’ssole
The BIA sets out the terms of the Offer in full. Further details of the Offer will also be included in the Bidder’s Statement and Target’s Statement that will be despatched to Summit shareholders shortly.
Under the indicative timetable, the Offer is expected to close at 5pm (Perth time) on 12 October 2018 (unless extended in accordance with the Corporations Act).
Intentions of other significant shareholders
Paladin is Summit’s largest shareholder with an existing interest of82.08% of the Summit shares on issue.
The beneficial owners of Summit shares representing 14.81% of Summit shares on issue have indicated their intention to instruct their respective custodians who hold their Summit shares to accept the Offer in full no earlier than 21 days after commencement of the Offer period in the absence of a superior proposal and the independent expert not concluding that the Offer is not fair and not reasonable (Shareholder Intention Statements).
Signed Shareholder Intention Statements have been received by the following beneficial owners of Summit shares:
- 22,109,045 shares beneficially owned by Orano Cycle (held through BNP Paribas Nominees Pty Ltdascustodian)whichequatestovotingpowerofapproximately14%;and
- 10,189,249 shares held by Revelation Special Situations Fund Ltd (held through Citicorp Nominees PtyLimitedascustodian)whichequatestovotingpowerof67%.
The Orano Cycle Shareholder Intention Statement is also subjectto there being no Paladin Material Adverse Change (as that term is defined in the BIA).
Indicative Timetable
| Event | Key Date |
| Announcement of the Offer | 1 August 2018 |
| Expected dateof lodgementof Bidder’s Statement andTarget’s Statement with ASIC and ASX | 11 September 2018 |
| Expected date of despatch ofBidder’s Statement andTarget’s Statement to Summit shareholders | 13 September 2018 |
| Expected Offer open date | 13 September 2018 |
| Expected Offer close date (unless extended in accordance with the Corporations Act) | 5pm (Perth time) on 12 October2018 |
Advisers
Steinepreis Paganin is acting as Australian legal adviser to Paladin.
Bellanhouse is acting as Australian legal adviser to Summit.
Source: Paladin Energy Ltd
