MOD Resources lays out scheme for recommended acquisition by Sandfire

MOD Resources updated the market on the proposal from Sandfire Resources to acquire 100% of the issued shares of the company by way of a scheme of arrangement on Wednesday.

The Sydney and London-listed firm said that on 20 August, the Supreme Court of Western Australia approved the dispatch of the company's scheme booklet, and ordered that it convene a meeting of its shareholders to consider and, if thought fit, approve the scheme.

It also said the Competition Authority of Botswana had provided approval for the scheme, which was necessary for implementation.

The board said the scheme booklet, a personalised proxy form, election forms and notice for the scheme meeting would be released on the relevant stock exchanges following registration with the Australian Securities and Investments Commission, and will also be available on the company's website.

It said the scheme booklet would be printed and mailed to shareholders, with the board urging MOD shareholders to “carefully read” the scheme booklet in its entirety, and the materials accompanying it, before deciding whether to vote in favour of the scheme.

The scheme meeting to approve the scheme would be held in West Perth on 1 October, the board confirmed.

If the scheme is implemented, MOD shareholders - other than European shareholders, ineligible foreign shareholders and MOD shareholders who held an unmarketable parcel - would receive scrip consideration of 0.0664 new Sandfire shares for every one MOD share held.

Alternatively, they could make an election to receive cash consideration of 45 Australian cents per MOD share, up to a maximum aggregate cash consideration of AUD 41.6m (£23.28m).

Eligible shareholders that did not make a valid cash election by 1700 WAST on 19 September would not receive cash consideration, and would be issued Sandfire shares if the scheme becomes effective, the MOD board explained.

“The board of directors of MOD unanimously recommends that all MOD shareholders vote in favour of the proposed scheme, in the absence of a superior proposal for the company and subject to the independent expert continuing to indicate that the scheme is in the best interests of MOD shareholders,” the board said in its statement.