Deltic Energy (AIM:DELT) , formerly Cluff Natural Resources, has received a letter from IPGL Holdings Limited ("IPGL"), stating its intention not to support the proposed £12.34m takeover offer from Reabold Resources which Deltic ‘unequivocally rejected’ last week.
Reabold issued a statement on Wednesday, without the consent of Deltic, proposing an all-share offer, which would see 1.5 Reabold shares be exchanged for each Deltic share.
In response, Deltic said on Thursday that the Proposed Offer does not place an appropriate value on the company, specifically placing no value at all on its significant non-cash assets.
In today’s letter, IPGL, which is controlled by Michael Spencer who is the largest shareholder in Deltic, reiterated its continuing support of Deltic's management team, its technical capability as well as its ‘focused asset base with high impact potential and current strategy’.
Shares in Deltic Energy opened at 0.85p following the announcement.
The Board of Deltic reiterated this morning that it continues to believe that the Proposed Offer does not place an appropriate value on Deltic Energy and that it ‘lacks any compelling strategic rationale, commercial logic or sufficient operational synergies’ for the group.
Deltic added that it does not reflect the commercial and technical risks associated with the Reabold portfolio and their potentially dilutive impact on Deltic's own portfolio and prospects.
The company previously highlighted that the proposed offer would be a risky investment for its shareholders who would be exposed to some of Reabold’s portfolio of projects, if the two businesses were to become one as a result of the takeover.
Reabold’s announcement details that Deltic will have until 5pm on August 12 to either make a firm offer or announce that it does not intend to do so under UK takeover and merger rules.
IPGL holds 236,432,780 shares in Deltic, representing 16.8% of the issued share capital and does not have a shareholding in Reabold.
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