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Metals Exploration: Candy’s Solomon Capital closes bid with 65 pct, company to remain quoted for now

Metals Exploration: Candy’s Solomon Capital closes bid with 65 pct, company to remain quoted for now

Solomon Capital closed its protracted and unsuccessful takeover bid for Metals Exploration (LON:MTL)  this morning.

Christian Candy’s investment vehicle has a control over a 53.5 percent stake in the gold company, which rises to 65 percent with warrants and options.

Over the next three months Metals Exploration will review whether or not it will apply to take the company private and de-list from the AIM market, as set out in the circular that was sent out to shareholders in March.

However any decision would need the backing of 75 percent of Metals Exploration shares. Therefore such a proposal would need support from minority shareholders.

Solomon launched the £35.76 million offer last July. Despite taking a majority stake and initiating an unconditional offer the deal has since become embroiled in some of the intricate nuances that govern the City.

The deal was complicated by the fact that a number of other parties, aligned with Solomon, were also buying shares in Metals Exploration at the time of the offer. 

Consequently certain shareholders complained to the City’s takeover and mergers panel, which could have forced Solomon to up the acquisition price. While the panel were investigating the case a deal was struck between the aggrieved shareholders and Solomon.

As part of this deal the minority shareholders were given the right to appoint a director to represent their interests on the board. This director would have certain rights to veto boardroom decisions.

The panel subsequently confirmed that it would not have to up its offer. Solomon then launched a subscription and shareholders' agreement so it could close the offer, while giving shareholders the chance to back out of the deal.

This morning Solomon revealed that it can maintain a 65 percent stake in Metals Exploration after shareholders with around 7.16 percent of the company, who had previously accepted the offer, backed out of the deal.

In total Solomon has control of 53.5 percent of the shares in Metals Exploration. Outright Solomon holds 147.6 million shares or represents 31.9 percent and Shelfco 724 Ltd, a company wholly owned by Christian Candy, has 100 million shares which represents another 21.6 percent. 

With the exercise warrants and options Solomon can gain control of 65 percent of the company.

 

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