Kinterra matches Central Asia’s bid for New World

[Ben Graham]

Kinterra Capital has made an improved offer to buy Australia’s New World Resources (ASX: NWC) as it looks to beat London-listed Central Asia Metals (LSE: CAML) in the takeover battle.

On Monday, Kinterra lifted its offer from A$0.057 to A$0.062 a share, the same price CAML offered in its off-market bid last week. CAML’s previous best offer was A$0.055 before Kinterra came into the fold.

At market close in Australia, New World’s shares traded at A$0.065 apiece for a market capitalization of A$215.7 million ($141.8 million).

‘Superior offer’

While its offer, on a per-share basis, is the same as CAML, Kinterra argues that its revised bid is “superior” in many aspects, including fewer conditions and a quicker timeline.

In its statement, the Canadian private equity firm noted that its proposal is subject only to no “prescribed occurrences” occurring before the offer period ends. In contrast, CAML’s offer is subject to many conditions, including regulatory (i.e. CFIUS and North Macedonia), court and shareholder approvals.

In addition, Kinterra said its offer is scheduled to open by no later than July 10, while CAML’s won’t be voted on until mid-September, which even if successful, may not be implemented until October.

Kinterra’s offer avoids the execution risk and timing implications arising from this conditionality under
the CAML proposal, the firm stated.

Shareholder power

Moreover, Kinterra said it will not vote in favour of CAML’s proposal, noting that as New World’s largest shareholder with a 19.3% stake, it has “the ability to materially influence the outcome of any shareholder vote on any competing offer.”

With respect to CAML’s proposed A$10 million funding to New World for obligations related to the Antler copper project in Arizona, Kinterra said it is willing to engage in talks on interim funding, with the expectation that New World will terminate its agreement with CAML due to Kinterra’s competing offer.

Located 15 km east of Yucca in northwestern Arizona, New World’s Antler project is host to a high-grade, polymetallic deposit with a resource of 11.4 million tonnes grading 4.1% copper equivalent per tonne. A 2024 prefeasibility study outlined a 12-year mine capable of producing 341,100 tonnes of copper equivalent.