Hancock Prospecting has launched an offer to purchase the remaining shares that it doesn’t already own in Canada’s Riversdale Resources.
Gina Rinehart-owned Hancock would pay $2.50 per share for Riversdale should its holding in the company reach above 50 per cent. Should Hancock secure Riversdale in entirety, the buyout could be worth around $591 million.
Otherwise the offer will stand at a base offer of $2.20 a share.
Hancock’s current holding in Riversdale is 19.8 per cent. It purchased 19.99 per cent of Riversdale as a strategic investment in August last year for $68.9 million, short of the 20 per cent required to announce an off-market takeover bid.
Riversdale, which is not a publicly-listed company, is best known for its development of the Grassy Mountain coal project in Alberta, Canada.
The project is projected to produce 93 million tonnes of coking coal over a 24-year mine life.
Riversdale’s biggest shareholder is United States-based private equity firm Resource Capital Funds (RCF), which holds a 47.98 per cent stake in the company.
“The directors of Hancock consider that its premium pricing and low conditionality make it a compelling opportunity for Riversdale shareholders,” Hancock Prospecting executive director Jay Newby said.
The $2.50 figure is a 47 per cent premium on Riversdale’s weighted average subscription price of $1.70 (the price at which Hancock purchased its 39.38 million shares last year) and a 43 per cent premium to Riversdale’s $1.75 maximum subscription price over the last 12 months.