Panoramic Resources has opened its doors to Independence Group (IGO) and other parties that might be interested in making offers to acquire the company.
After IGO’s unsuccessful efforts to engage with the target’s board, to then offering a hostile takeover bid directly to Panoramic’s shareholders, the nickel producer has now committed to exploring all options to find the best deal possible.
Panoramic has established a data room and is providing a number of parties, including IGO, with information to conduct due diligence to allow them to put forward alternative proposals.
IGO’s offer earlier this month comprised one of its shares for every 13 Panoramic shares, valuing the target at $312 million.
Panoramic urged of shareholders to “take no action” in response to the offer, contrasting IGO’s claims that the bid will allow them to crystallise future value from the Savannah nickel operation in Western Australia at a very attractive price.
IGO managing director and chief executive Peter Bradford said the offer represented a rare instance of genuine and mutual benefit for both companies.
Since Panoramic’s poor performance induced by setbacks at the Savannah project, the delivery on the full potential of the nickel operation has been questioned.
Panoramic this week produced first development ore from the Savannah North deposit and expects to ramp up output from the site over the coming weeks.
Although Zeta Resources, one of Panoramic’s key shareholders, backed the target’s response, it remains open to a superior proposal from IGO or other bidders.
Zeta, supporting confidence in the positive long-term outlook on the nickel market, believes Savannah North is an attractive and strategic asset.
Panoramic has also launched an operational review, which is due within the two weeks and will include updated production guidance for the 2020 financial year.
The company assures shareholders that by allowing parties to put forward alternative proposals it will maximise the potential value for shareholders, but reiterates advice to “take no action”.