Norton Gold Fields has secured victory in its hostile $28 million takeover bid for Bullabulling Gold after the target's board yesterday conceded defeat.
The concession from the Peter Mansell-chaired Bullabulling came three months after Norton pounced with its 7ï¿½-a-share bid, later increased to 8ï¿½.
Bullabulling had argued the Norton bid undervalued its namesake gold project, east of Kalgoorlie-Boulder, and pointed to independent expert BDO's target valuation of between 11.1ï¿½ and 16.1ï¿½. Norton had counter- argued that Bullabulling did not have the financial muscle to develop its $300 million project.
Bullabulling directors said yesterday they "remain of the view that Norton's offer materially undervalues Bullabulling".
"However, after carefully considering the implications of Norton's current relevant interest (41.4 per cent) in Bullabulling, which has resulted in effective control of the company, the directors have reached the inevitable conclusion that they should amend their recommendation to shareholders, and therefore have unanimously resolved to recommend that shareholders accept Norton's 8Â¢ offer," they said.
"Despite Bullabulling's very best efforts, there have been no alternative or betters offers presented for Bullabulling."
Most of dual-listed Bullabulling's big shareholders have already sold into the bid, and Norton will expect a flood of acceptances from owners of both the London and Australian Securities Exchange-traded shares.
Bullabulling shares closed steady at 8Â¢ yesterday, a high since last August. Norton, which has seen its shares slide 8 per cent to 12Â¢ since announcing the bid, plans to close the offer on July 16.