Horizon Minerals Ltd (ASX:HRZ) will continue engaging with Focus Minerals Ltd (ASX:FML) regarding the acquisition of the Coolgardie Gold Project after the Focus board determined that another offer “is not a superior proposal”.
This follows China Hanking Holdings Ltd (HKG:3788) announcing on the Stock Exchange of Hong Kong that it had made a non-binding indicative cash offer (NBIO) for the project in WA’s Goldfields.
After considering all relevant circumstances and seeking input from its advisers, the Focus board concluded that the Hanking NBIO was not superior to that that put forward by Horizon.
Offer is more advanced
Relevant factors in Focus’ determination were that the Horizon proposal was substantially more advanced, including due diligence being completed, and currently had greater execution certainty.
Horizon is seeking to acquire the project, which includes the Three Mile Hill processing plant, as it has direct synergies with the company’s other gold assets in the region.
On February 11, 2019, Focus announced that it had entered into an exclusivity deed with Horizon in relation to the sale.
Proposal increased
After being advised of the non-binding indicative proposal from Hanking, Horizon exercised its matching rights under the exclusivity deed and increased its non-binding proposal to A$55 million.
This comprises A$12 million in fully paid ordinary shares, based on a 20-day VWAP, and A$43 million in cash, which is payable in tranches.
On September 19, 2019, Focus received the Hanking NBIO on an unsolicited basis subject to commercial terms along with the completion of due diligence by Hanking and negotiation of binding transaction documents.
The commercial terms of the Hanking NBIO amount to between A$56 million and $65 million, including an upfront cash payment of $12 million and subsequent tranches.
Price query
After receiving a price query letter from the ASX on Wednesday, Horizon outlined that the Hanking offer, which was announced on the Hong Kong exchange on September 23, was the reason for the change.
Horizon also stated to the ASX that it was in compliance with the applicable Listing Rules.