Metal Tiger PLC (LON:MTR) was a strong riser on Monday as the London-listed shares of its Australian partner MOD Resources Limited (LON:MOD, ASX:MOD) shot higher after receiving an unsolicited bid approach from Sandfire Resources (ASX:SFR).
Sandfire has made a non-binding indicative offer of 38c a share just as MOD has completed launched an A$15mln, which comprised a fully underwritten rights issue at 24c and an institutional placing at 30c per share.
MOD said the offer “undervalues MOD’s unique and extensive assets” even though it is pitched at a substantial premium to both the prices of the fundraiser and the market price beforehand.
The company owns 100% of the T3 copper project in Botswana and listed in London in November to raise awareness about the project.
In a statement revealing the offer, as well as confirming the capital raise, MOD said: “The Company is willing to engage with Sandfire and grant confirmatory due diligence if a compelling price is presented and capable of being supported by the Board and MOD shareholders.”
But, it added: “MOD has not received any offer capable of acceptance by the Company's shareholders and no certainty that the Indicative Proposal will result in a transaction.”
Metal Tiger confirmed that it has made a non-binding commitment to take up its entitlements under the rights issue.
MOD’s managing director, Julian Hanna said: “Funding from this capital raise will enable the Company to progress the T3 Copper Project towards a development decision and conduct further drilling for additional resources.”
He added; “The unsolicited, indicative proposal for 100% of the Company received from Sandfire confirms the potential of the T3 Copper Project, however, the Board considers it significantly undervalues the assets of the Company.”
In afternoon trading in London, shares in dual-listed MOD were up 60.7% to 22.50p, while Metal Tiger shares were up 22.5% to 1.5p.
Metal Tiger owns 12.5% of MOD and substantial options after it swapped its stake in T3 for shares in its partner and 30% of an exploration joint venture in numerous licences that surround the T3 copper development.
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