Javelin Minerals (ASX:JAV) has dropped its off-market takeover bid for unlisted public company Gecko Minerals.
Upon completing its due diligence as part of the takeover arrangement, Javelin has provided notice to Gecko of the termination of the takeover bid implementation agreement.
Javelin, which has a $10.87 million market capitalisation, in early September offered Gecko shareholders 185 JAV shares for every Gecko share held for full control of the company.
This would mean that if all Gecko shareholders accepted the deal, Javelin would issue roughly 5 billion shares under the takeover offer.
Javelin was eyeing Gecko’s two Ugandan lithium projects: Ntungamo, comprising one exploration licence and two exploration licence applications covering 60km-square; and Mityana, comprising one exploration licence application covering 240km-square.
Commenting on the proposed takeover offer at the time, Javelin Minerals Executive Director Matthew Blake said the deal represented a ‘major opportunity’ for the company as a lithium explorer and potential future lithium producer.
When the proposed takeover was first announced, Gecko directors were unanimously recommending shareholders accept the deal, and Javelin had already entered into pre-bid acceptance agreements with Gecko shareholders who controlled just under 18% of the company.
However, the arrangement is now off after Javelin’s due diligence seemingly left the company unsatisfied. Javelin did not specify which aspects of its due diligence work prompted the termination of the bid.
Still, Javelin plans to move forward with the capital raising announced to the ASX on 6 September in tandem with the takeover deal, subject to shareholder approval at its AGM on 21 November 2023.
The company plans to raise $2 million via a share placement to sophisticated and professional investors. This will be conducted in 2 tranches.
Javelin seek approval for the issue of 5 billion options to the company’s corporate advisors and for the consolidation of its shares on a ten-for-one basis.
The company is a diversified explorer focused on its projects across Australia. Javelin’s assets include the Husky and Malamute, Coogee, Mt Ida, and Bonaparte projects.
As of 30 June 2023, the company had $443,000 cash and cash equivalents at hand, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au
Images: Javelin Minerals
