Takeovers Panel rejects Ramelius concerns over Westgold-Karora deal
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The news: The Australian Government Takeovers Panel has declined to make a declaration of unacceptable circumstances in response to an application by Ramelius Resources regarding Westgold's deal to takeover Karora.
The numbers: Earlier this year, Canadian miner Karora agreed to a $1 billion takeover from Perth-based Westgold, days after ending talks with its ASX rival Ramelius. Westgold, which said the combined entity would have a market capitalisation of around $2.2 billion, is set to put the takeover proposal to a shareholder vote this month.
Ramelius and Westgold had previously entered into a mutual confidentiality deed which included a mutual standstill for a period of 12 months, ending on 14 November 2024.
In May, following news of the Westgold-Karora deal, Ramelius submitted an application to the Takeovers Panel, seeking changes to the arrangement agreement between the two companies, including to the C$40 million ($43.43 million) termination fee and disclosure in relation to the estimate of synergies.
The context: The panel considered that the termination fee payable by Westgold to Karora is "not currently having an anti-competitive effect".
It also did not deem Westgold's continued reliance on the standstill in the confidentiality deed to be inappropriate, nor did the panel consider that there was reason to question further whether there were reasonable grounds to support Westgold and Karora's disclosed estimates of operating and corporate synergies.
The panel considered that it was not against the public interest to decline to make a declaration of unacceptable circumstances.
Following Ramelius' application, the panel said it did have concerns in relation to the non-solicitation provisions in the arrangement agreement between ASX-listed Westgold and Toronto-listed Karora. However, it noted that those concerns were sufficiently addressed by Westgold and Karora's undertakings to amend the relevant provisions.
The source: ASX announcement
