News Column

Bullabulling Board Accepts Norton Gold Fields Takeover Offer

July 3, 2014

Tom McIvor

LONDON (Alliance News) - Bullabulling Gold Ltd Thursday caved into pressure from Norton Gold Fields Ltd and recommended that shareholders accept its increased takeover offer despite continuing to say it materially undervalues the company.

Bullabulling, which mines for gold in Australia, said it sees the AUD0.08 a share offer as too low, but because Norton has already increased acceptances, including from Bullabulling's two major shareholders, to a 41.35% interest, the company's board bowed to pressure and unanimously resolved to recommend the offer.

Norton Gold Fields made a cash offer of AUD0.07 a share for Bullabulling on April 17, but struggled to get many acceptances. In mid-June, it said it would raise the offer to AUD0.08 a share, but only if it got an interest of 30% or more of Bullabulling's shares by June 30.

On June 17, Bullabulling said an independent expert hds valued Bullabulling shares at between AUD0.111 and AUD0.161, with a preferred value of AUD0.146.

However, after the increased offer by Norton and increase in its interest, the Bullabulling directors said on Thursday that they have lost effective control of the company.

Bullabulling said that at this point it is unlikely that any resolutions put to shareholders could be passed without Norton's support, meaning it has power over the management and board composition of the company, the timing of its future gold mining development programmes, and the methods of finding funds for developing its flagship Bullabulling Gold Project.

It added that despite its best efforts, it has not been able to achieve a better offer for the company and noted that Norton has made it clear the AUD0.08 offer is final and is scheduled to close on Wednesday July 16.

Bullabulling share were down 0.5% at 3.98 pence early Thursday.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Alliance News

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters