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Sierra Rutile Holdings Limited (ASX: SRX) has announced that its board of directors has unanimously recommended shareholders accept a takeover offer from Leonoil Company Limited.
This recommendation follows the signing of a Bid Implementation Agreement (BIA) between the two companies, aimed at consolidating Leonoil’s market position by acquiring all issued and outstanding ordinary shares of SRX that it does not already own.
Under the terms of the agreement, Leonoil will offer a cash price of A$0.18 per SRX share, representing a 12.5% premium to the A$0.16 per share offer from Gemcorp announced on July 1, 2024. This offer also signifies a 90% premium compared to the A$0.095 per share bid by PRM Services LLC in March 2024. The total undiluted equity value implied by Leonoil’s offer is A$76.4 million.
The Leonoil offer does not require a minimum acceptance condition, unlike Gemcorp’s offer, which required a 51% minimum acceptance. As of the announcement date, Leonoil holds a 19.85% interest in SRX’s issued and outstanding ordinary shares.
The board of SRX has stated that in the absence of a superior proposal, it unanimously recommends that shareholders accept the Leonoil offer. The directors have also indicated their intention to accept the offer for all SRX shares they own or control.
