Kaz flips structure from scheme to offer amidst shareholder opposition

Kaz flips structure from scheme to offer amidst shareholder opposition

Nova Resources B.V. (Bidco), the vehicle acquiring FTSE 250 copper miner Kaz Minerals on behalf of company Chair, Oleg Novachuk, and director, Vladmir Kim, announced that it will now be implementing the acquisition by way of takeover offer.

Novachuk and Kim, who currently hold 39% of shares in Kaz Minerals, proposed to acquire the remaining 61% of shares and delist the company. The offer was originally structured as a scheme of arrangement – a structure many suitors opt for, as it guarantees the acquiring party will end up with 100% of the company, should the scheme be approved.

The court hearing and general meeting to approve the £3bn takeover were originally scheduled for early December but were postponed after the company ran into opposition from minority shareholders who felt the opportunistic offer undervalued the company and its prospects. The opposing shareholders, CFC Management and RWC partners, hold stakes of 3.6% and 3.3% in Kaz respectively. The scheme of arrangement structure would have required a collective holding of only 12% to sink the deal, a fate that would be binding on all shareholders.

The new structure of a takeover offer allows interested shareholders to accept the offer of 640 pence per share, regardless of the opposition, subject the acceptance threshold of 75% being met. However, this arrangement means that Novachuk and Kim are no longer guaranteed to acquire 100% of the issued share capital of Kaz.

Bidco has confirmed that it currently has received irrevocable undertakings to accept the offer in respect of 9.52% of Kaz’s issued share capital.

Market Tracker will continue to monitor this transaction as it develops.

For in-depth analysis of trends in UK Public M&A in 2020, including a look at takeover structures, look out for our Market Tracker full year trend report, to be released in Q1 2021.

 

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