Nova Resources raised its bid for KAZ Minerals plc (LON: KAZ) on Friday to £4.02 billion. Minority stakeholders, including CFC Management (Russia-based) and RWC Partners, had previously expressed their displease with the earlier proposals, pushing the group into lifting its offer by 9.0%.
KAZ shares jumped a little under 3% in premarket trading on Friday but remained almost flat through the rest of the day. Including the price action, the stock is now exchanging hands at £8.64. In comparison, it had started the year 2021 at £6.60 per share. Here’s what you need to know about the stock market volatility.
The new proposal offers KAZ shareholders 850 pence per share in cash
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Shareholders had cited a robust increase in copper prices that, they said, made the earlier bids too low to consider. The new proposal from Nova Resources offers 850 pence per share (cash) to shareholders versus 780 pence that it had suggested earlier.
KAZ chairman Oleg Novachuk who also controls Nova Resources, said on Friday:
“Copper market dynamics have evolved since the announcement of the original offer in October 2020, and the final increased offer fully reflects this change.”
The final bid translates to 869 pence per share in total, including a special dividend. It’s the second time that Nova Resources, which wishes to take KAZ Minerals private, had to raise its bid since its original proposal that it put forward in October.
In separate news from Europe, German car manufacturer Volkswagen said it will seek damages from its former CEO Martin Winterkorn over the diesel emissions scandal.
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KAZ shareholders have to decide on the new bid until 9th April
Peel Hunt analysts commented on the news on Friday and said:
“We continue to believe the KAZ business is worth at least our 920 pence target price, but the increased offer is likely to test shareholder resolve to hold out further.”
KAZ shareholders now have until 9th April to announce their verdict on the raised bid. The news comes on the same day when the British multinational insurance firm, Aviva plc, said it will sell its entire stake in its polish unit to German Allianz SE for £2.14 billion.
KAZ Minerals performed fairly upbeat in the stock market last year with an annual gain of more than 20%. At the time of writing, the British copper company has a market cap of £4.07 billion and a price to earnings ratio of 9.16.