Nordgold has sweetened its proposed takeover offer of Cardinal Resources (ASX, TSX: CDV) in order to beat out competition from China's Shandong Gold.
The latest offer would see the Russian gold miner acquire all of the Cardinal shares that it does not currently own for A90 ? (US66 ?) per share in cash, up from its previous offer of A66 ? (US48 ?) per share.
Cardinal's board of directors has advised shareholders not to take any action until a further update is provided. The company had previously received an offer of A70 ? (US51 ?) per share from Shandong, which received backing from the board.
The Shandong offer is subject to a 50.1% minimum acceptance condition, with the Foreign Investment Review Board (FIRB) already granting approval.
Cardinal also told shareholders that while Nordgold's cash offer was higher than the offer made by Shandong, the company had certain obligations under the bid implementation agreement signed with Shandong, including matching rights in favour of the Chinese gold producer.
Cardinal has interests in a number of mining tenements in Ghana, but is focused on the development of its Namindi project, which has an estimated ore reserve of 5.1 million oz. gold.
Shares of Cardinal Resources soared 29.2% on the TSX by midday on Sept. 2 on news of the increased offer, giving the company a market capitalization of $475 million.
Cardinal Resources' stock also closed 26.9% higher on the ASX, with a market value of approximately A$484 million (US$355 million).