Independence Group (IGO) has extended its takeover offer for Panoramic Resources to January 17 2020 in light of contract breaches related to the bid.
IGO’s hostile, off-market takeover bid was originally announced on November 4 after unsuccessful attempts to engage with Panoramic’s board on a deal to change control.
After Panoramic’s struggle to improve productivity at the Savannah nickel-copper-cobalt operation, IGO directly presented its offer to Panoramic shareholders.
IGO’s offer in November comprised of one of its shares for every 13 Panoramic shares, valuing the target at $312 million.
Panoramic’s acknowledgement of the bid described it as an unsolicited, highly conditional scrip takeover offer and the company urged shareholders to “take no action”.
IGO set out a number of conditions for the deal that was considered to be necessary to confirm the status of operating performance at Savannah.
On November 12, Panoramic was required to appoint a technical expert at its own cost to complete a report on the Savannah operation, which it hadn’t done within the expected period.
Alongside restrictions in its capital expenditure and obligation to provide due diligence access to IGO, the dictation of Panoramic’s response was restricted in its ability to take routine actions.
“Given the nature of the conditions, in addition to the above breaches, there are likely to be further breaches in the future,” Panoramic stated.
As at November 15, Panoramic’s list of potential failures and likely breaches of IGO’s conditions was growing.
“As previously advised, it is open to IGO to rely on any breach of these conditions to terminate its offer, or to waive any breach,” Panoramic stated.
Now, in an effort to assess its position, IGO has extended the offer so that it now closes on January 17 2020.
Panoramic shareholders now have time to assess the independent expert’s report that has been commissioned by the company. The report is set to be finalised on December 23 2019.
IGO states that its due diligence on Panoramic is continuing and that its findings will be assessed alongside the independent expert report.