By Amin Kef Sesay
In a significant move, the Board of Sierra Rutile has approved a $76.4 million takeover bid by the indigenous Sierra Leonean company, Leonoil Company Limited. The announcement was made on Sunday, July 21, via the Australian Stock Market.
This development underscores Leonoil’s successful bid against competitors, including the UK-based Gemcorp and the US-based PRM Service LLC, led by Gerald Group CEO Craig Fuad Dean.
Sierra Rutile and Leonoil Company Ltd have jointly announced their entry into a Bid Implementation Agreement (BIA). Under this agreement, Leonoil will acquire all issued and outstanding shares of Sierra Rutile that it does not already own. This offer comes as an off-market takeover bid with no minimum acceptance condition.
The Leonoil bid offers a 12.5% premium to the 0.16% per share offer price made by Gemcorp Commodities Asset Holding Limited in their off-market takeover bid announced on July 1. Notably, Leonoil’s bid is not subject to any minimum acceptance condition, unlike Gemcorp’s requirement of a 51% minimum acceptance condition.
Leonoil is currently a major shareholder with a 19.85% interest in the issued and outstanding shares of Sierra Rutile. The bid implies a total undiluted equity value of Sierra Rutile at A$76.5 million. To acquire the remaining shares, Leonoil is prepared to pay up to A$61 million.
The Board of Sierra Rutile recommends that all shareholders accept the Leonoil offer. They have indicated their intent to accept the Leonoil offer for all Sierra Rutile shares they own or control, in the absence of a superior proposal.
This approval marks a pivotal moment in Sierra Rutile’s corporate history, bringing it under the stewardship of an indigenous Sierra Leonean entity, which could potentially reshape the future of the company.
