Sibanye-Stillwater, which already owns 19.9% of New Century, said it planned to acquire another 10.92% of the target on market at or below the A$1.10 per share offer price. The South African company has been expanding into recycling and waste management and said in a statement that it had bought a stake in New Century because of its tailings business. New Century has been producing zinc from the tailings, or waste, of what was once the country's largest zinc mine, Century, in Australia's Queensland state.
But in recent times, New Century's focus had moved elsewhere and it was losing value and direction, Sibanye-Stillwater said, raising concerns that an equity raising could be needed to fund growth projects. New Century last month issued a pre-feasibility study on its Mt Lyell copper project, which would cost an estimated A$279 million to develop. Shares of New Century have declined significantly since hitting a peak of A$24.69 in October 2017 and were down 8.9% this year as of the last close before the takeover offer was announced.
Sibanye-Stillwater said it had expressed its concerns over
the company's direction to the board before making the takeover
bid and had not supported the proposed re-election of two
directors in November.
New Century's board recommended that its shareholders "Take
No Action" regarding the offer. The board will consider the
offer and provide a recommendation in due course, the target
said in a statement.
($1 = 1.4478 Australian dollars)
(Reporting by Rishav Chatterjee in Bengaluru and Melanie Burton
in Melbourne; Editing by Dhanya Ann Thoppil and Jamie Freed)
