Helix Resources (ASX:HLX) is urging shareholders to send in their proxy votes before 17 November as a decision on the hostile partial takeover offer from Acta Investment Group and its associate Nuevo Royalty looms.
The proportional off-market takeover bid includes privately held Australian investment firm Acta seeking to have three nominees – Michael Povey, Kevin Lynn, and David Scoggin – appointed to Helix’s board.
Speaking to Mining.com.au, Helix Resources Chairman Mike Rosenstreich says with the target’s statement released, the most important next step is the AGM on 19 November for shareholder participation and voting on the proposed appointments and Acta’s cash offer for 25% of Helix’s shares it or its associates do not own or control at $0.005 per share.
Rosenstreich notes the target’s statement took a few days longer to release due to deficiencies in background information about the three board nominees. If the nominees are elected, an incredulous Helix Chairman says there is a possibility the suitors will obtain board control with just a 16.87% shareholding.
There are concerns that due to the conditions of the offer there is potential that Acta could obtain board control and then not proceed with the bid.
Helix is recommending shareholders reject the offer and board seat bids and with the offer open until 15 January 2025 “there is plenty of time for people to decide” and become further informed about the takeover tilt.
Helix Resources has retained Hamilton Locke as legal counsel and New Holland Capital as corporate advisors to advise on the process.
Rosenstreich details how “really disappointed” he is with how the process is playing out and how sparse the information is that Acta has provided in terms of the three nominees. He suggests there has also been a lack of clarity for Helix shareholders “as to what they’re going to do differently” or better than the incumbent board.
Acta and the three board nominees could not be reached for comment prior to going to press.
According to Rosenstreich, the partial takeover offer is opportunistic and came as a surprise with neither Acta nor Povey, Lynn, or Scoggin engaging Helix prior to launching the bid.
“They suddenly appeared on the share register, and they suddenly appeared with the takeover offer. Frankly, I was surprised,” the Chairman adds.
Acta and Nuevo are owned by veteran resources investor Povey, which took a 6.51% stake in Helix a week before the initial offer on 30 August.
“Maybe, had one tapped the board on the shoulder with an offer to finance the company directly, that would have been a much more constructive, collaborative, and positive way for all parties concerned. So the modus operandi here, I find concerning and unusual,” says Rosenstreich.
Acta’s offer represents a 39% premium to Helix’s 30-day volume weighted average price of $0.0036, however the target says the offer does not provide an adequate premium for control and undervalues the company.
Yesterday’s target’s statement flags the Acta nominees’ track record at other companies is not considered better than the current Helix board, and raises concerns about ‘reputational risks’ for the company.
Acta has stated its intention to conduct various works, which Rosenstreich says is no different to what Helix is already undertaking.
“Are they going to do what Helix is already doing? Is it better? On what basis, they do not say,” he adds.
Helix believes the offer includes “restrictive conditions” including limiting the company from making material expenditure above $50,000, which conflicts with its current exploration objectives and drilling programs, as reported by Mining.com.au.
These conditions risk hampering Helix’s ability to operate effectively and continue the copper-gold exploration projects already underway in the Cobar region, as reported. Other implications flagged include not having a long-term commitment to the company, in addition to limited or no information on the board nominees.
Write to Aaliyah Rogan at Mining.com.au
Images: Helix Resources
