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Regis Resources Limited (ASX:RRL) shares lower on acquisition bid

Confirming media speculation, Regis Resources Limited (ASX: RRL) this morning announced that it has submitted a confidential, indicative and incomplete proposal to acquire small-cap gold developer Capricorn Metals Ltd  (ASX: CMM).

The indicative proposal contemplates an offer of 11.4 cents in Regis shares per Capricorn share, representing a premium of 93.2% to the closing Capricorn share price on Friday, September 21, 2018.

The transaction is conditional on Regis receiving the recommendation of the Board of Capricorn, the support of Capricorn’s major shareholders, and execution of a binding implementation agreement.

While Capricorn’s Board has confirmed that it would unanimously recommend the proposal, Capricorn’s largest shareholder, Hawke’s Point, has not yet been prepared to support it. Hawke’s Point holds an 18.9% interest in Capricorn.

A meeting has been scheduled this week between Regis and representatives of Hawke’s Point to determine whether its support will be garnered.

The Regis Resources share price has fallen 7% this afternoon, down 29 cents to $3.85.

Capricorn Metals has seen its share price skyrocket higher on the news, up 51% to 8.9 cents.

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Motley Fool contributor Lauren Surplice has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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