| A higher all-cash offer has been made for Golden Energy & Resources (GEAR) shares which encourages shareholders to opt for the all-cash option -- instead of part share and part cash. From 84.6 Singapore cents a share in the original all-cash offer announced in Nov 2022, it's now 97.3 cents, a 15% increase, said GEAR and offeror Duchess Avenue in a joint statement over the weekend. The 97.3 cents all-cash option is slightly superior to the revised 96.4 cents value that a shareholder will get if he opts for part share and part cash, according to GEAR's illustration. |
Thermal coal operations at GEMS. File photo.
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Highest ever |
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“Since the resumption of trading of GEAR shares in December 2016 following completion of the reverse takeover exercise of the Company, the closing prices of the shares have not exceeded the Revised All Cash Consideration of S$0.973.” |
Being more attractive, the new all-cash option addresses the complaint that shareholders had regarding the trading illiquidity and forex risk from accepting shares under the original offer of PT Golden Energy Mines (GEMS), a Jakarta-listed entity, in a partial exchange for GEAR shares.
GEAR owns 62.5% of GEMS.
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Golden Energy & Resources |
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Subsidiary |
Commodity |
Ownership by GEAR |
Jurisdiction |
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GEMS |
Thermal coal |
62.5% |
Indonesia |
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Stanmore |
Metallurgical coal |
64.1% |
Australia |
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Ravenswood |
Gold |
50.0% |
Australia |
The all-cash offer, which increased to 97.3 cents from 84.6 cents, comprises:
| • Increase in cash price by 18%, to IDR6,500 from IDR5,500 for GEMS shares. This will be paid in Singapore dollars based on fixed SGD:IDR exchange rate, thereby removing forex risk up to date of payment. • Increase in exit offer price by 13%, to 18.1 cents from 16.0 cents. The exit offer covers GEAR's stakes in various assets, especially 64%-owned ASX-listed Stanmore Resources and 50%-owned Ravenswood Gold Group, an unlisted gold miner in Australia. |
| Factors considered in determining the increase: |
| (a) the financial performance of GEAR and its subsidiaries for the year ended 31 December 2022, and the business outlook as described in GEAR’s results announcement published on 27 February 2023; (b) the financial resources available to GEAR, the Offeror and DSS to implement the proposed transactions (including the payment of the revised cash alternative price by GEAR and PT Dian Swastatika Sentosa Tbk (DSS)*, and the revised exit offer price by the Offeror); and c) the historical traded price of the Shares. GEAR notes that since the resumption of trading of the Shares in December 2016 following completion of the reverse takeover exercise of GEAR, the closing prices of the shares have not exceeded the revised all-cash consideration of S$0.973. * With a 77.5% stake, DSS is the majority shareholder of GEAR. |
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