Metallica Minerals (ASX:MLM) has committed to waive the standstill condition related to a takeover bid from Diatreme Resources (ASX:DRX) by 17 June, unless a superior proposal is put forward before then.
On 30 October 2023, Metallica and Diatreme entered into a confidentiality deed which contains a standstill undertaking, restricting Diatreme’s ability to acquire securities in Metallica without the company’s consent.
It was a key part of the takeover offer put forward in February, under which Metallica shareholders will receive 1.3319 fully paid ordinary shares in Diatreme for each share in Metallica held.
Diatreme reached minimum acceptances under the offer and extended its proposed off-market takeover of Metallica to 14 June 2024, unless further extended or withdrawn.
Following achieving minimum acceptance, Diatreme submitted that “given the circumstances, it is unacceptable for the standstill not to be released immediately.”
Metallica’s board is continuing its efforts to secure a better deal, and is continuing to engage with an interested party, which is yet to put forward a proposal of its own. The interested party is aware of the Diatreme bid and the associated timetable, including Metallica’s decision to waive the standstill.
Since Diatreme announced the conditional intention to bid, Metallica says three interested parties were given access to a data room that was established for the purpose of providing disclosure in relation to the Cape Flattery Silica Sand (CFS) Project.
“Each of the parties is a foreign company with credible record of resource project development. Two of those parties have a record of resource project development in Australia,” Metallica said in a supplementary target’s statement on 21 May.
“One of those parties made a cash non-binding indicative offer which the board of Metallica believed did not consider appropriately valued the CFS Project. Engagement with that party recently ceased after a period of negotiation, in an attempt to increase the cash price offered.
“Another party continues to conduct due diligence on Metallica. Whilst this party is yet to make a proposal, the party is aware of the Diatreme bid and the associated timetable and, based on recent discussions between that party and Metallica, that party continues to express an interest in a potential offer for the CFS Project.”
Write to Aaliyah Rogan at Mining.com.au
Images: Metallica Minerals
