Media Release: Kingsgate Directors REJECT Northern Gulf Petroleum Takeover Offer
Kingsgate Directors REJECT Northern Gulf Petroleum Takeover Offer
The Directors of Kingsgate Consolidated Limited (ASX:KCN) (“Kingsgate” or the “Company”) have today unanimously advised shareholders to REJECT the opportunistic and inadequate proportional takeover offer by Singapore-based Northern Gulf Petroleum International Pte. Ltd. (“NGPI”) of 4.2 cents per Kingsgate share.
In the Target’s Statement released to Kingsgate shareholders today, the Directors advise that Grant Thornton Corporate Finance, acting as an Independent Expert, has concluded that the offer is NOT FAIR and NOT REASONABLE. This conclusion supports the view held by the Kingsgate Board that the NGPI offer significantly undervalues the Company.
The offer is materially lower than the Independent Expert’s value range of 27.9 to 42.0 cents per share. It also fails to recognise Kingsgate’s improved prospects and financial position; is highly opportunistic in its structure and timing; and ignores the strong potential of Kingsgate’s flagship asset, the Nueva Esperanza Gold/Silver Project in Chile.
The Bidder’s Statement is unclear and uncertain regarding the future operation and growth of Kingsgate should NGPI gain control.
NGPI Takeover – Target’s Statement
NGPI Takeover Offer for Kingsgate
– Target’s Statement
Your Directors unanimously recommend that you
REJECT
the inadequate and unsolicited takeover offer by Northern Gulf Petroleum International Pte. Ltd. to acquire 50.1% of your Kingsgate Shares for 4.2 cents cash per Share.
You should read the entire document. If you are in doubt as to what you should do, you should obtain independent advice from your investment, financial, tax or other professional adviser.
If you have any questions about the Offer, please contact the Kingsgate Shareholder Information Line on 1 800 882 102 (toll free) (within Australia) or +61 1 800 882 102 (outside Australia).
Update on Resumption of Trading
Update on Resumption of Trading
Kingsgate Consolidated (ASX:KCN) (“Kingsgate” or the “Company”) has requested the Australian Securities Exchange (“ASX”) to reinstate its securities to trading following release of its Target’s Statement which will respond to the proportional takeover offer by Northern Gulf Petroleum International Pte. Ltd.
Kingsgate will be releasing its Target’s Statement to the ASX prior to the market opening on Monday, 17 October 2016, and the ASX has agreed that the Company’s securities will be reinstated following a short delay.
Greg Foulis
Chief Executive Officer
Kingsgate Consolidated Limited
Mineral Resources and Ore Reserves 2016
Kingsgate Mineral Resources and Ore Reserves 2016
Kingsgate Consolidated Limited (ASX:KCN) (“Kingsgate” or the “Company”) wishes to advise that it has updated its Mineral Resources and Ore Reserves for the period ending 30 June 2016. The update takes into account mining depletion and current economic and operational assumptions. Reflecting the importance of silver, Mineral Resources and Ore Reserves are quoted for gold, silver, and on a gold equivalent (AuEq) basis.
Update on the Sale of the Bowdens Silver Project
30 September 2016
Update on the Sale of the Bowdens Silver Project
Kingsgate Consolidated (ASX:KCN) (“Kingsgate” or the “Company”) is pleased to provide an update on the purchase of the remaining 15% of the Bowdens Silver Project by Silver Mines Limited (ASX:SVL).
On 30 June 2016, Kingsgate advised that it had entered into a Deed of Variation with Silver Mines Limited, for an additional payment of A$5 million in return for the remaining 15% of the Bowdens Silver Project.
By way of an amendment to the Deed of Variation, both Kingsgate and Silver Mines Limited have now agreed to the following terms:
- Kingsgate will receive a non-refundable payment of A$1 million on 30 September 2016, with the residual amount to be paid on or prior to 30 December 2016;
- the remaining A$4 million (plus interest of 10% per annum calculated from 30 September 2016 to the date payment is made) of the post completion amount is payable to Kingsgate; and
- should Silver Mines Limited not pay the final balance of A$4 million by 30 December 2016, the parties will form an unincorporated 85%-15% Joint Venture with Kingsgate retaining 15% as contemplated under the original Agreement.
Greg Foulis
Chief Executive Officer
Chairman’s Letter to Shareholders – 28 Sept 2016
28 September 2016
Dear Shareholder,
Unsolicited takeover offer from Northern Gulf Petroleum International Pte. Ltd.
On 16 September 2016, Kingsgate Consolidated Limited (“Kingsgate”) received an unsolicited takeover offer from Singaporean entity, Northern Gulf Petroleum International Pte. Ltd. (“Bidder”) (the “Offer”). The Offer is to acquire 50.1% of the Kingsgate shares held by each shareholder for 4.2 cents per share.
You will soon receive a copy of the Bidder’s Statement in the mail from the Bidder, which will contain further details relating to the Offer.
Kingsgate Board recommends that shareholders TAKE NO ACTION before reviewing Kingsgate’s Target Statement which will be sent to you in mid-October.
Your Board is currently undertaking a detailed review of the Offer.
At this early stage, your Board recommends that you should simply TAKE NO ACTION in relation to the Offer and your Kingsgate shares.
Do not fill in any documents sent to you by the Bidder.
While your Board’s review is not yet complete, your Board would like to share with you the following initial observations in relation to the Offer:
- The Offer is opportunistic as it has been made while Kingsgate shares are in voluntary suspension;
- The Offer is only a proportional offer. This means that the Bidder is seeking to acquire 50.1% of your shares, so that it can secure control of Kingsgate at minimal cost; and
- Based on the Bidder’s Statement, the Bidder has neither the experience nor the credentials needed to realise the significant potential of Kingsgate’s flagship asset, the wholly-owned Nueva Esperanza Gold/Silver Project in Chile – in fact, the Bidder’s Statement barely gives any attention to this asset.
Full details of your Board’s formal response to the Offer and the Bidder’s Statement will be provided in Kingsgate’s Target’s Statement, which will be sent to shareholders in mid-October. You will have ample time to consider your Board’s recommendation after you receive our Target’s Statement.
Yours sincerely,
Ross Smyth-Kirk
Chairman