Takeovers Panel backtracks on ERA offer
The Takeovers Panel has made a U-turn on its stance towards a planned A$800-million entitlement offer by former uranium miner Energy Resources of Australia (ERA).
The panel has reversed an earlier decision to allow the discounted offer to go ahead unchallenged and has determined that it will conduct proceedings.
The announcement follows an application by Zentree Investments and Packer and Co for a review of an earlier decision by the Takeovers Panel to allow the entitlement offer to continue without proceedings.
The applicants flagged concerns about the potential increase in Rio Tinto’s control over ERA. Rio Tinto, which currently holds about 86.3% of ERA, could see its stake grow to 99.25% if no other shareholders participate.
ERA on August 28 announced the capital raise to fund rehabilitation work at the Ranger project area, in Northern Territory, until the third quarter of 2027. At A$0.002 a share, the offer represents an 87.8% discount to the company’s stock on the last day before a trading halt was instituted ahead of the capital raise announcement.
ERA previously warned that it was likely to breach its minimum cash reserve of about A$50-million in the fourth quarter of the year and that it would deplete its cash resources by the end of the year or early in 2025. The equity raise was deemed necessary to ensure ERA remained solvent.
“Noting the uncertainty created by the review application, the Independent Board Committee will advise of a revised entitlement offer timetable after the outcome of the Review Application is known,” ERA said on Monday.
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