Primary Gold backs $37.5m Hanking takeover offer

China’s Hanking has launched a $37.5 million takeover offer for explorer Primary Gold.

The target’s board has recommended shareholders accept the 5.75-cent-a-share bid unless a superior offer is proposed and ahead of an independent report on the deal.

Hanking is Primary’s largest shareholder with an 8.4 per cent interest. Hanking’s managing director, Mark Yumin Qiu, has been a non-executive director of Primary since 2014.

The offer is a 47.3 per cent premium on the company’s share price of 39 cents on February 16.

Primary chairman and managing director Garry Mills said the offer provided an attractive opportunity to realise a significant premium and certain cash value.

“The independent directors of Primary intend to accept the offer, in the absence of a superior proposal and subject to the independent expert not concluding that the offer is not fair and not reasonable,” Mills said.

Primary’s main asset is the Mt Bundy operation in the Northern Territory. It also owns the Coolgardie project, which it plans to launch production at this year.

The deal is subject to a number of conditions, such as Hanking acquiring an interest in excess of 50 per cent and approval from the Foreign Investment Review Board (FIRB).