Russians at War With China Over Aussie Gold Company

(AFR) — The bitter battle between Russia and China for control of a Perth-based gold company has taken another twist, with the rival suitors now putting matching bids to shareholders.

Nordgold, controlled by Russian oligarch and steel billionaire Alexey Mordashov, upped its bid for Cardinal from A$0.90 ($0.63) a share to A$1 a share on Wednesday, valuing Cardinal at about A$538 million as gold stocks continue to shine.

The move came hot on the heels of China’s Shandong Gold informing Cardinal that its A$1-a-share offer due to close on Friday was its “best and final,” and could not be increased unless there was a superior offer from Nordgold or a third party.

The Russians and Chinese are at war over Cardinal’s 5.1 million-ounce Namdini project in northeast Ghana.

The war has raged since March, when Nordgold put up a A$0.457-a-share takeover offer after building a 19.9% stake.

State-owned Shandong Gold, China’s second-biggest gold producer, responded in June with a A$300 million off-market takeover offer pitched at 60¢ a share.

Nordgold and Shandong Gold have continued their bidding war since then, with Nordgold increasing its stake to about 28% and Shandong Gold holding about 12% of the stock.

Cardinal shares were trading at A$1.03 on Wednesday, with the board urging shareholders to await further advice.

“Cardinal is currently considering the implications of the increased Nordgold takeover bid in consultation with its advisers and having regard to the provisions of the bid implementation agreement with Shandong Gold,” it said.

The Cardinal board had previously backed the Shandong Gold bid, which has received a tick of approval from the Foreign Investment Review Board.

Nordgold’s offer is not due to close until Nov. 3 and it is determined to take control of the Namdini project, which is near some of its existing operations in Africa.

Nordgold chief executive Nikolai Zelenski said it was “fully committed to successfully closing its offer and to the future success of the Namdini project.”

“We are Cardinal’s largest shareholder and this revision represents the third price increase that Nordgold has made, while conversely Shandong has announced that it will not be increasing its price further,” he said in a statement.

Zelenski said Nordgold was the best owner of Namdini, considered one of the world’s best undeveloped gold projects.

“We have a strong West African business and remain committed to operating in the region,” he said.

“Nordgold notes that it has sought and received change of control approval from the government of Ghana, while, to the best of our knowledge, Shandong has not sought to do so.

“In the event that Nordgold does not acquire the full outstanding share capital of Cardinal, but remains the largest shareholder, we stand ready to work with Cardinal management to quickly progress the Namdini project and to provide technical and financial support to underpin its success.”

This article was originally published by the Australian Financial Review

Contact editor Yang Ge (geyang@caixin.com)

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