Ann: Westgold Takeover Offer - Board Assessment, page-66

AFR

Nov 1, 2021 – 8.52am

It mightbe the world’s most over-used internet meme, but the image known as “distractedboyfriend” will surely get another run this week as investors try to make senseof the dilemma facing gold miner Gascoyne Resources.

Gascoynethought it was onto a good thing in June when it proposed marriage to FireflyResources, which has exploration acreage close to Gascoyne’s mine and mill.

The dealis due to be formalised on Monday at a court hearing, and estimates by anindependent expert suggest shares in the combined group would be worth about18¢.

But likethe male caught glancing at a female passerby in “distracted boyfriend”, a bigproportion of the Gascoyne share register has turned away from Firefly to gazeat what they believe is a better offer.

Westgoldhas proposed to buy Gascoyne under a scrip deal that values the stock at about48¢.

ButWestgold does not want to share Gascoyne. It has insisted Gascoyne call thingsoff with Firefly before their unrequited deal can be formalised.

TheGascoyne board has determined the Westgold offer to be superior, but noted onFriday that prenuptial agreements with Firefly had left it legally incapable ofextricating itself from what looms as an unhappy marriage.

OnlyFirefly, whose share register includes prominent smallcap investor Tolga Kumova, has the right to cancel Monday’s wedding.

“Gascoynehas recently written to Firefly enquiring as to whether Firefly would exerciseits right to terminate,” the Gascoyne board said on Friday.

Notsurprisingly, Firefly “declined to confirm that it would exercise its rights”,meaning the two companies remain on track to be wed on Monday.

Close to47 per cent of Gascoyne shareholders have publicly signalled that they do notwant to proceed with the Firefly marriage and would either prefer the Westgolddeal, or cautiously consider it to be superior.

The bigquestion remains whether the court will rubber-stamp the deal on Monday in theface of such investor reluctance.

As they sit at the apex of a messy lovetriangle, the board of Gascoyne could be forgiven for deploying anotherwell-worn internet meme and asking: “Porque no los dos [Why not both]?”