New Century Resources has finally broken its silence following Sibanye-Stillwater’s off-market takeover bid, advising shareholders to accept the offer.
In an ASX announcement, the New Century board has unanimously recommended that its shareholders accept the offer of $1.10 per share.
The board said that it was unlikely a competing offer would be put forward, as Sibanye already owns a 73.41 per cent interest.
The 73.41 per cent is an unprecedented increase from the 19.9 per cent in held in February this year when Sibanye originally made its bid.
“As noted in the half-year accounts to 31 December 2022, a material uncertainty exists that may cast significant doubt on New Century’s ability to continue as a going concern,” the announcement stated.
Sibanye has made it clear that it plans to cause New Century to apply to the ASX for removal from the offical list if it does not achieve compulsory acquisition.
“We will continue to advocate for change in the current strategic direction of New Century,” the company said in a statement announcing its bid.
“Sibanye has also recently become aware that a number of shareholders in New Century may be looking to dispose of their holdings on market.
“Sibanye has been concerned about the change in strategic direction of New Century under current management, with the building of a tailings asset management service business no longer a focus.”
Sibanye called the New Century balance sheet “under strain”, due to potential funding requirements for growth projects and which could result in a raise in additional equity and a material dilution for existing shareholders.
At the time, New Century recommended that its shareholders take no action however due to Sibanye’s increased investment percentage and in the absence of competing bids, the company has changed its tune.
“The offer delivers certain value in the form of cash consideration and importantly a liquidity opportunity for New Century shareholders,” the company said in the announcement.