Cardinal Resources (ASX:CDV) takeover by China's Shandong finally wraps up

Shandong Gold has nearly completed its acquisition of Cardinal Resources after a bidding war with Russia. Canada isn't so keen.

Western Areas takeover Mainstream share price takeover M&A bidding war asx shares asset sales and mergers and acquisitions represented by two business men playing tug of war with rope Cleanaway share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Chinese state-owned Shandong Gold's acquisition of Cardinal Resources Ltd (ASX:CDV) is just about complete.

Shandong is one of the world's largest gold miners, and the company announced today that it now has a relevant interest in 95.62% of all Cardinal shares. Shandong will acquire all remaining shares by 3 February 2021.

Five business days later, Cardinal's shares will be suspended and the ASX will remove Cardinal from its official list.

A fight to the finish: China and Russia duke it out over Cardinal

The path to where we are has not been straight forward. Just a few months ago, there was a public bidding war between Shandong and Russian mining giant Nord Gold S.E. over the acquisition of Cardinal Resources.

Back in September, Nord Gold put out a public offer of 90 cents a share to acquire Cardinal Resources. Shandong bid $1 and that's what set off the war over Cardinal. 

Russia and China continued to haggle for around three months in an effort to outbid the other. Finally, at the end of December, Shandong reigned victorious with the winning offer of $1.07 a share. 

Now here we are, nearly a month later, and the deal is coming to a close.

Why won't Canada sell to Shandong?

Meanwhile, Shandong has also been making moves to buy another gold mine located in the Canadian Arctic. However, as reported in Wall Street Journal (WSJ), the effort was blocked last month by Canadian Prime Minister Justin Trudeau.

The reason the purchase was blocked is due to growing concern about the rising influence Beijing is having in both Canada and the polar region. According to the WSJ, advice for this action came from former Canadian national security and military officials.

The Australian also mentions Canada's concerns over national security and notes that if relations between Canada and China remain tense over this issue, it may open new opportunities for Australian coking coal exports in Beijing.

How has this impacted the Cardinal Resources share price?

The Cardinal Resources share price currently sits at $1.06 having gained around 187% over the past 12-month period. Looking at a five-year window, Cardinal Resources shares are up close to 800%.

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Australian dollar notes in the pocket of a man's jeans, symbolising dividends.
Share Market News

Buy these excellent ASX dividend shares for 5%+ yields

Analysts expect above-average dividend yields from these shares.

Read more »

Two miners examine things they have taken out the ground.
Broker Notes

Up 64% this year! What's Macquarie's price target for Lynas Rare Earths shares?

Clouds on the horizon?

Read more »

Man ponders a receipt as he looks at his laptop.
Opinions

3 reasons why the Xero share price could be a strong buy

This stock has all the hallmarks of a long-term winner.

Read more »

a group of people in business attire gather around a computer in an office environment with expressions of concern as they try to nut out the answer to a challenge they are facing.
Broker Notes

Leading broker just downgraded the Fortescue share price. Is it time to sell?

Downside ahead for the iron ore titan?

Read more »

A man in trendy clothing sits on a bench in a shopping mall looking at his phone with interest and a surprised look on his face.
Share Market News

5 things to watch on the ASX 200 on Monday

Here's what to expect on the local market today.

Read more »

a man sits back from his laptop computer with both hands behind his head feeling happy to see the Brambles share price moving significantly higher today
Broker Notes

Broker tips Domino's Pizza share price to rise 54% in FY26

Ord Minnett says the current Domino's Pizza share price offers "very attractive value".

Read more »

Happy shareholders clap and smile as they listen to a company earnings report.
Share Market News

Top fund manager backs these 3 ASX 200 shares to shine in FY26

Let’s see who they are.

Read more »

Worker working on a gas pipeline.
Share Market News

Macquarie predicts 26% upside for this ASX utilities stock

Here’s what’s behind the brokers recommendation.

Read more »