Riversdale takes time to consider Hancock takeover bid

Grassy Mountain. Image: Riversdale Resources

The board of Riversdale Resources has recommended shareholders take no action relating to a takeover offer received from Hancock Prospecting last week.

Hancock made a base offer to Canada-based Riversdale of $2.20 per share for all the shares it doesn’t already own, to be increased retroactively to $2.50 per share should Hancock achieve a holding above 50 per cent.

This would translate to a potential maximum payment of $591 million should Hancock achieve 100 per cent of the company’s shares.

Hancock’s current holding in Riversdale stands at 19.8 per cent. As a privately owned company, over three-quarters of Hancock is owned by executive chairperson Gina Rinehart.

Riversdale, best known for developing the Grassy Mountain coking coal project in Alberta, released a March 2 statement suggesting its shareholders take no action until the company releases its target’s statement and board’s recommendation. Riversdale’s target’s statement will include an independent expert report to determine whether Hancock’s offer is “fair and reasonable”.

“Until the target’s statement and board’s recommendation is available, Riversdale recommends that shareholders take no action in relation to their Riversdale shares,” the statement read.

Should Hancock fully acquire Riversdale it will represent the iron ore major’s first foray into Canadian operations.

Perth-based Catalyst Metals announced last week that Hancock-owned company Gold Exploration Victoria (GEV) was investing $13 million for around 11 per cent of the company.  GEV already owned 50 per cent of Catalyst’s flagship Four Eagles gold project through a joint venture with the company.

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