The market may be having a subdued start to the week, but that hasn't stopped one ASX mining stock from rocketing higher today.
At the time of writing, Rex Minerals Ltd (ASX: RXM) shares are up 65% to 45.5 cents.
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Why is this ASX mining stock rocketing?
Investors have been scrambling to get hold of the copper and gold developer's shares after it received and accepted a takeover offer.
According to the release, Rex Minerals has entered into a scheme implementation deed with MACH Metals Australia.
Under the scheme, it is proposed that MACH will acquire all of the shares in Rex Minerals which it does not already own for cash consideration of 47 cents per share. This represents a 71% premium to where the ASX mining stock ended last week and values the company at $393 million.
The release notes that the MACH offer was received following a competitive global partnering process. This process was focused on the $854 million funding and subsequent development pathway for the Hillside Copper-Gold Project in South Australia.
The Rex Minerals board carefully assessed the offer against a range of other alternatives. After taking into account the risks and potential ownership dilution associated with a stand-alone development of Hillside, it decided the offer was the superior option.
As a result, the ASX mining stock's board unanimously recommends that shareholders support the transaction by voting in favour of it. This is in the absence of a superior proposal and subject to the independent expert's report.
'Significant premium'
Rex Minerals' CEO and managing director, Richard Laufmann, said:
The Transaction provides certainty of value and a significant premium representing a 98% uplift relative to Rex's 90-day VWAP, as well as the opportunity for Rex shareholders to realise their investment at a 10-year historical share price high. This Transaction also represents a more certain outcome for wider stakeholders in Hillside, including the local community, the South Australian Government and Rex employees who will benefit from the significant financial strength and proven track record of MACH to deliver the successful development of Hillside.
The South Australian Government has been a leader in Australia in support of decarbonisation and copper development. The successful development of Hillside will very much align with their strategy. Subject to approvals, we look forward to working with MACH through to completion and watching them develop the Hillside Project, Australia's largest fully permitted and shovel ready copper project.
