Shares in Nusantara Resources Ltd (ASX: NUS) are soaring today on news the miner is likely to be acquired by Indika Energy. At the time of writing, the Nusantara share price is trading at 34 cents – 11.48% higher than its previous closing price.
Nusantara announced today it has entered a scheme of arrangement for its major shareholder to purchase all Nusantara shares that it doesn't already own for 35 cents apiece.
Let's take a closer look at today's news from the Australia-based gold and minerals explorer.
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Acquisition proposal
Indika's offer of 35 cents per share is a 19% premium on the 5-day volume-weighted average price of Nusantara's shares and values the company at around $80 million.
The two companies are currently joint venture partners in the Indonesian-based Awak Mas gold project. Nusantara holds 75% of the project while Indika holds 25%.
Nusantara announced news of Awak Mas' front end engineering and design (FEED) process today. According to Nusantara, the FEED is nearly complete and will form the basis of the mine's definitive feasibility study (DFS). Nusantara plans to update the market on Awak Mas' DFS next month.
The company's independent board committee said the acquisition would help the company avoid potentially higher than expected costs of Awak Mas, continued COVID-19 disruptions, and the challenges junior ASX mining companies faced when trying to finance projects in foreign jurisdictions.
Nusantara's independent board committee has recommended that the company's shareholders vote in favour of the acquisition. However, their advice depends on an independent expert report finding the acquisition is in Nusantara shareholders' best interest. Additionally, their advice depends upon Nusantara receiving no better offer.
Nusantara's second and third-largest shareholders, whose combined holdings make up 26.7% of the company, have indicated they intend to vote in favour of the acquisition.
Indika's proposal will face a vote by Nusantara's shareholders in September.
Nusantara share price snapshot
Today's gains have seen the Nusantara share price make it out of the red on the ASX.
Currently, shares in Nusantara have gained 17% year to date. However, they've just broken even with their share price 12 months ago.
The company has a market capitalisation of around $69 million, with approximately 229 million shares outstanding.
