Medusa Mining Limited
("Medusa" or the "Company")
The board of Medusa notes the release of the following announcement
by Crosby Capital Limited (reproduced below).
The board recommends that shareholders take no action at this time. A
further announcement will be made in due course.
Contacts:
Medusa Mining Limited +61 8 9367 0601
Geoffrey Davis, Managing Director
Roy Daniel, Finance Director
Fairfax I.S. PLC +44 (0)20 7598 5368
Nominated Adviser/Joint Broker
Ewan Leggat
Mirabaud Securities Limited +44 (0)20 7321 2508
Joint Broker
Peter Krens / Rory Scott
Lothbury Financial +44 (0)20 7011 9411
Michael Padley / Louise Davis
ASX & Media Announcement
19 September 2008
CROSBY CAPITAL ANNOUNCES TAKEOVER BID FOR
MEDUSA MINING (ASX: MML, AIM: MML)
21% PREMIUM TO MARKET PRICE
Crosby Capital Limited, a Hong Kong based merchant banking and asset
management group (Crosby or the Crosby Group), announced today its
intention to make an off-market takeover offer for 100% of the shares
in Medusa Mining Limited (Medusa or the Company).
Crosby, through a special purpose vehicle (the Bidder), will offer to
purchase all the ordinary shares of Medusa (including ordinary shares
to be issued on the exercise of outstanding options), for A$1.15 cash
per share (the Offer).
The Offer values Medusa at approximately A$182 million on a fully
diluted basis.
Benefits of the Offer to Medusa Shareholders
Crosby believes that the Offer for Medusa provides significant
benefits to the shareholders of Medusa, including:
* a premium of 21.1% to yesterday's closing price of
Medusa shares, and a premium of 23.3% to the 1 month VWAP of Medusa
shares;
* provides shareholders with the opportunity to
dispose of a large number of shares to realise the value of their
investments in Medusa in cash at a substantial premium to the
current market price;
* removes uncertainty and avoids the risks over the
Company's capability to develop and fund its operations going
forward; and
* there is no certainty that Medusa's shares would
trade at or above the Offer price if Crosby's Offer lapses and no
competing bidder emerges, and there is a risk that in this
circumstance Medusa's share price would fall significantly.
Subject to satisfaction or waiver of the conditions, the Offer allows
Medusa shareholders to effectively transfer such risks to the Crosby
Group and realise a substantial premium in cash for their
investments.
Conditions to the Offer
The Offer is subject to a condition that an Independent Expert
confirms certain matters concerning Medusa's assets, Medusa's
resource and reserve estimates and other Medusa statements concerning
prospective performance. The Offer is subject to a separate condition
that Medusa gives Crosby an opportunity to undertake reasonable due
diligence. These conditions are important to Crosby so that it can
affirm the terms of its Offer including the offer price. If the
Independent Expert condition is fully satisfied, Crosby will waive
the due diligence condition.
These conditions and other conditions to the Offer are set out in the
annexure to this announcement.
Existing interests in Medusa
The Bidder currently owns 400,000 Medusa shares, representing
approximately 0.28% of the total issued shares in Medusa.
Separately, Crosby Active Opportunities Fund (CAOF), an investment
fund independently managed by a subsidiary of Crosby Asset Management
Inc. (an 82% owned subsidiary of Crosby), owns 6,693,925 (or
approximately 4.6%) of the total issued shares in Medusa. The asset
management activities of the Crosby Group are distinct from the
Crosby Group's merchant banking activities. The merchant banking
group, which is making the Offer, has no control or influence over
CAOF's investment in Medusa and there is no arrangement, agreement or
understanding in relation to the continued holding or sale of such
investment.
Next steps and timetable
The Crosby Group's bidder's statement is expected to be lodged in
October 2008 and will subsequently be dispatched to Medusa
shareholders.
Media enquiries
For further details on this announcement, please contact:
Michael Mullane, Savage & Partners (Public Relations Adviser to
Crosby): +61 2 8281 3257
Joey Borromeo, Managing Director, Crosby Capital Limited: +852 2169
2823
About Crosby Capital Limited
Crosby Capital Limited (formerly Techpacific Capital Limited) is an
independent merchant banking and asset management group listed on the
Hong Kong Stock Exchange's GEM board (HK GEM 8088), with offices in
China, Singapore, the United Kingdom and representation in other
parts of Asia. The Group is engaged in the businesses of merchant
banking, asset management, venture capital fund management and direct
investment. Its subsidiary, Crosby Asset Management Inc. (formerly
Crosby Capital Partners Inc.), which carries out the Group's asset
management business, is quoted on London's Alternative Investment
Market (CSB LN).
Further information on Crosby can be found on www.crosby.com
ANNEXURE
Conditions of the Offer
The Offer to be made for all ordinary shares in Medusa will be
subject to conditions substantially as set out below:
(a) Regulatory actions
Between the Announcement Date and the end of the Offer Period:
(1) there is not in effect any preliminary or final decision,
order or decree issued by a Public Authority;
(2) no action or investigation is announced, commenced or
threatened by any Public Authority; and
(3) no application is made to any Public Authority (other than
by Bidder) or commenced by a Public Authority,
in consequence of or in connection with the Offer (other
than application, decision or order made under, or relating to a
breach of, Chapters 6, 6A, 6B or 6C of the Corporations Act or
unacceptable circumstances for the purposes of the Corporations Act),
which:
(A) restrains or prohibits, or otherwise materially adversely
impacts upon, the making of the Offer or the completion of any
transaction contemplated by the Offer; or
(B) seeks to require the divestiture by Bidder of any Medusa
Shares, or the divestiture of any material assets of Medusa or a
subsidiary of Medusa (Medusa and its subsidiaries being defined as
the Medusa Group) or of Bidder or a related body corporate of the
Bidder (Bidder and its related bodies corporate being defined as the
Bidder Group).
(b) Other regulatory approvals
During the Offer Period, all regulatory approvals, consents or
waivers (Approvals) (other than Approvals the absence of which would
not have a material adverse effect on the assets or operations of the
Medusa Group, or the Bidder Group) which are required by law or by
any Public Authority as are necessary to permit the Offer to be made
to and accepted by Medusa shareholders and to permit any transaction
contemplated by the Offer to be completed are granted, given, made or
obtained on an unconditional basis and remain in full force and
effect in all respects and do not become subject to any notice,
intimation or indication of intention to revoke, suspend, restrict,
modify or not renew the same.
(c) FIRB
One of the following occurs before the end of the Offer Period:
(1) Bidder receives a notice from the Treasurer of the
Commonwealth of Australia (Treasurer) or his agent to the effect that
there is no objection to the Offer under the Commonwealth
Government's foreign investment policy, such notice being
unconditional;
(2) the period provided under the Foreign Acquisitions and
Takeovers Act 1975 (Cth) (as amended) (the Act) during which the
Treasurer may make an order or an interim order under the Act
prohibiting the acquisition of Medusa Shares under the Offer expires,
without such an order being made; or
(3) if an interim order prohibiting such acquisition is made, the
subsequent period for making a final order has elapsed, without such
final order being made.
(d) Options
(1) Before the end of the Offer Period, Medusa does not amend
or vary the terms of any options granted by Medusa (other than to
cancel those options in accordance with paragraph (2) below); and
(2) Before the end of the Offer Period:
(A) all of the options granted by Medusa have been exercised,
or cancelled by Medusa (for an amount per option not exceeding the
cash offered under the Offer for each Medusa Share minus the exercise
price of the option); or
(B) the Bidder has agreed to acquire or is entitled to
compulsorily acquire all outstanding Medusa options; and
(3) At the end of the Offer Period there are no outstanding
agreements to issue Medusa shares or any other Medusa securities (and
there are no Medusa securities on issue other than the Medusa Shares
and options).
(e) No hedging
(1) As at the Announcement Date, no member of the Medusa Group
has entered into, offered to enter into or announced that it proposes
to enter into any gold price hedge, derivative or similar
arrangement; and
(2) Between the Announcement Date and the end of the Offer
Period, no member of the Medusa Group enters into, offers to enter
into or announces that it proposes to enter into any gold price
hedge, derivative or similar arrangement.
(f) Independent Expert
Within 4 weeks of the Announcement Date either:
(1) an independent expert nominated by Crosby and acceptable
to Medusa; or
(2) if the person nominated is not acceptable to Medusa, an
independent expert nominated by Medusa and acceptable to Crosby
(acting reasonably),
(in either case, the Independent Expert) is provided by Medusa with
access to information (including, but not limited to relevant
operational sites, operating information and management personnel)
for the purposes of enabling the Independent Expert to conduct an
investigation into the resource estimates, and the past and
prospective performance, of the Co-O Mine so that the Independent
Expert may complete the investigation and report to Crosby, on or
before the date 8 weeks after the Announcement Date, that in the
opinion of the Independent Expert:
(A) the Company's 25 year mining licence over the Co-O Mine and
surrounds is:
(1) valid and enforceable and free from any Encumbrances; and
(2) not subject to termination or modification,
sale, transfer or required to be offered for sale or transfer as a
result of the Crosby Group acquiring some or all of the Medusa Shares
(or for any other reason),
and the Company has all regulatory approvals, consents, waivers and
permits necessary to operate the mine (and will continue to do so
should the Bidder acquire 100% of the Company);
(B) the Company is expected to be able to meet its stated:
(1) target annualised production rate of 60,000
ounces gold in July 2009; and
(2) target annualised production rate of 100,000
ounces gold in 2010;
(C) the Company's estimate that, on completion of phase II of
expansion of the Co-O Mine, its long term cash costs will be around
US$200 per ounce is reasonable; and
(D) all resource and reserve estimates set out in the Company's
2008 annual report (including, for the avoidance of doubt, and
without limitation, on page 8 of the annual report which refers to
total indicated and inferred resources of 862,000 ounces of gold at
an average grade of 10.72 g/t gold and probable reserve estimates of
249,000 ounces of gold at an average grade of 10.77 g/t gold) are
reasonable and in compliance with the JORC Code.
The matters in paragraph (f)(A) may be confirmed by the Independent
Expert or alternatively by an independent legal adviser appointed by
the Independent Expert or agreed between Medusa and Crosby. For the
avoidance of doubt if the matters in (f)(A) are confirmed in a report
to Crosby (or to the Independent Expert) by an agreed legal adviser
and the matters in (f)(A) are satisfied by the Independent Expert as
set out above, this condition will be satisfied.
(g) Gold price
Between the Announcement Date and the end of the Offer Period (each
inclusive), the price of gold (as determined by the London pm fix)
does not fall below US$750/oz for a period of 3 or more consecutive
trading days.
(h) Cooperation and access to information
In addition and as a separate condition to paragraph (f) above, at
all times during the period from the Announcement Date to the end of
the Offer Period, Medusa promptly (and in any event within three
business days) provides Crosby with all access and information which
Crosby may from time to time reasonably request, whether or not such
information is generally available (within the meaning of the
Corporations Act), relating to Medusa or any of its subsidiaries, or
its or their respective assets or business operations (including
without limitation access to all of Medusa's mining assets and
operations, including site visits by Crosby Group personnel and
advisors appointed by Crosby). For the purposes of this condition, a
request by Crosby will be deemed to be reasonable if it is for:
(1) information which a bidder in the position of Crosby would
reasonably require in order to make an informed assessment of the
business, financial or trading position, assets or liabilities,
profitability or prospects of Medusa or any of its subsidiaries; or
(2) information which has been provided by Medusa or its
associates to any other bidder or potential bidder for Medusa
(whether by takeover, scheme of arrangement or any other proposal or
proposals likely to lead to a change of control of Medusa or
Medusa's, or its subsidiaries', assets).
(i) No inaccurate public information
Crosby does not become aware, during the period from the Announcement
Date to the end of the Offer Period (each inclusive) that any
document filed by or announcement (including, for the avoidance of
doubt, the Company's 2008 annual report) made by or on behalf of
Medusa, or by or on behalf of any person in relation to Medusa, with
the ASX, ASIC or anywhere in the public domain, contains a statement
which is incorrect or misleading in any material way or from which
there is a material omission.
(j) No material adverse change
Save as publicly announced to ASX prior to the Announcement Date
(provided such announcement is full and fair, including, without
limitation, in relation to the extent and magnitude of the event,
change, condition, matter or thing, as the case may be), none of the
following events has happened since 31 December 2007, and none of the
following events happens or is disclosed between the Announcement
Date and the end of the Offer Period:
(1) any change in the business, assets, liabilities, financial
or trading position, profitability or prospects, the status or terms
of arrangements entered into with Medusa or any of its subsidiaries
or the status or terms of any Approvals which are directly or
indirectly applicable to Medusa or any of its subsidiaries (whether
or not wholly or partly attributable to the making of the Offer,
and/or the acquisition of Medusa Shares under the Offer), which has a
material adverse effect on the assets, liabilities, financial or
trading position, profitability, prospects or manner of conduct of
any of the Medusa Group's businesses;
(2) any event, actions, proceeding, circumstance or change in
circumstance which is reasonably likely to result in a material
adverse effect of the kind mentioned in paragraph (1) above; or
(3) the introduction into the Parliament of the Commonwealth
of Australia or of any State or Territory of Australia or of the
Philippines (whether at a national or provincial level) of any law,
the making of any regulation under any law, the adoption of a policy,
or any official announcement on behalf of the government of the
Commonwealth of Australia or any State or Territory of Australia or
the government of the Philippines (whether at a national or
provincial level) or a Public Authority that such law or regulation
will be introduced or policy adopted (as the case may be) which will
or is reasonably likely to have a material adverse effect on the
assets, liabilities, financial or trading position, profitability,
prospects or manner of conduct of any of the Medusa Group's
businesses or which will or is reasonably likely to result in the
incurring of a material liability to the Bidder Group or the Medusa
Group in implementing the transactions contemplated by the Offer.
(k) Capital expenditure
Between the Announcement Date and the end of the Offer Period (each
inclusive), Medusa does not incur or commit to incur an amount of
capital expenditure in excess of A$10 million other than:
(1) capital expenditure that has been announced by Medusa
before the Announcement Date as intended to be incurred or committed;
and
(2) capital expenditure in the day to day operating
activities of the business of Medusa and its subsidiaries conducted
in the same manner as before the Announcement Date.
(l) No persons entitled to exercise or exercising rights
under certain agreements or instruments
Between the Announcement Date and the end of the Offer Period (each
inclusive), there is no person entitled to exercise, exercising or
purporting to exercise, stating an intention to exercise (whether or
not that intention is stated to be a final or determined decision of
that person), or asserting a right to exercise, any rights under any
provision of any agreement or other instrument to which any member of
the Medusa Group is a party, or by or to which any member of the
Medusa Group or any of its assets or businesses may be bound or be
subject, which results, or could result, to an extent to which is
material in the context of Medusa Group taken as a whole, in:
(1) any moneys borrowed by any member of the Medusa Group
being or becoming repayable or being capable of being declared
repayable immediately or earlier than the repayment date stated in
such agreement or other instrument;
(2) any such agreement or other such instrument being
terminated or modified or any action being taken or arising
thereunder;
(3) the interest of any member of the Medusa Group in any
firm, joint venture, trust corporation or other entity (or any
arrangements relating to such interest) being terminated or modified;
(4) the assets of any member of the Medusa Group being sold
transferred or offered for sale or transfer, including under any
pre-emptive rights or similar provisions; or
(5) the business of any member of the Medusa Group with any
other person being adversely affected.
(m) No material acquisitions, disposals or changes in the
conduct of business
Between the Announcement Date and the end of the Offer Period, each
of the Medusa Group's businesses are carried on in the usual and
ordinary course, and neither Medusa nor any subsidiary of Medusa:
(1) enters into or announces an intention or proposal to enter
into;
(2) discloses (without having disclosed to ASX prior to the
Announcement Date) the existence of; or
(3) incurs, becomes subject to, or brings forward the time for
performance of (or is reasonably likely to incur, become subject to
or bring forward the time for performance of),
any obligation or arrangement:
(4) to acquire, dispose of or create an Encumbrance in respect
of or terminate or surrender any interest in any asset or business or
any interest therein;
(5) to perform or acquire the benefit of any services in
relation to any asset or business or interest therein; or
(6) to enter into, terminate, amend or waive any of the terms
applicable to a joint venture, asset or profit sharing, partnership
or joint selling agreement, merger of businesses or of corporate
entities, lease, licence or grant of any right,
which will result or is reasonably likely to result in a material
adverse change, following the Announcement Date (as compared with the
position immediately prior to the Announcement Date), in the assets,
liabilities, financial or trading position, profitability, prospects
or manner of conduct of any of Medusa Group's businesses, other than
obligations or arrangements which have been publicly announced to ASX
prior to the Announcement Date. Without limiting the operation of
this clause, any action described in (1) to (3) above in relation to
the following transactions will be in breach of this clause:
(7) the acquisition or disposal of one or more companies or
assets (or any interest in companies or assets) for an amount greater
than A$5 million;
(8) the disposal of any legal or beneficial, direct or
indirect, interest in any of the Medusa Group's exploration and
production asset; or
(9) any transaction referred to in (4) above involving a
commitment or a group of commitments of greater than A$5 million.
(n) No litigation on foot or pending
Between the Announcement Date and the end of the Offer Period (each
inclusive), no litigation against Medusa which may reasonably result
in a judgement of A$5 million or more is commenced, is threatened to
be commenced, is announced, or is made known to the Bidder (whether
or not becoming public) or Medusa, other than that which is in the
public domain as at the Announcement Date.
(o) Financial markets
Between the Announcement Date and the end of the Offer Period (each
inclusive), the S&P ASX 200 does not close below 4000 for 3 or more
consecutive trading days.
(p) Equal access
Between the Announcement Date and the end of the Offer Period, Medusa
promptly, and in any event within 2 Business Days, provides to the
Bidder a copy of all information that is not generally available
(within the meaning of the Corporations Act) relating to Medusa or
any of its subsidiaries, or their respective assets, liabilities or
operations, that has been provided by any member of the Medusa Group
or any of their directors, officers, advisors, agents or
representatives to any person other than the Bidder, other than in
the ordinary course of ordinary business, including (without
limitation) for the purposes of soliciting, encouraging or
facilitating any proposal with respect to:
(1) a takeover bid for, or scheme of arrangement proposed
by, Medusa, under the Corporations Act;
(2) the acquisition by that person or an associate of
substantially all the assets and operations of Medusa; or
(3) any transaction having a similar economic effect.
(q) Dividends and distributions
Between the Announcement Date and the end of the Offer Period, no
member of the Medusa Group makes, determines as payable or declares
any distribution (whether by way of dividend, capital reduction or
otherwise and whether cash or in specie).
(r) Prescribed occurrences
None of the occurrences specified in s 652C of the Corporations Act
happens between the Announcement Date and the end of the Offer Period
other than the issue of Medusa Shares as a result of exercise of the
options to be issued Medusa Shares described in paragraph (d) above.
(s) No hostilities
Between the Announcement Date and the end of the Offer Period, no
hostilities commence and there is no major escalation in any
hostilities in existence as at the Announcement Date (whether war is
declared or not) involving any one or more of Philippines, Australia,
Canada, the United Kingdom, USA, any member state of the European
Union, Japan, Russia or the People's Republic of China (other than
peace keeping functions undertaken at the request of the United
Nations, the North Atlantic Treaty Organisation or the European
Union) and no terrorist act is perpetrated on any of those countries
or any diplomatic or political establishment of any of those
countries elsewhere in the world, and no national emergency is
declared in any of those countries.
(t) No break fees
Between the Announcement Date and the end of the Offer Period, Medusa
does not agree (whether conditionally or unconditionally) to make any
payment by way of break fee, inducement fee, cost reimbursement or
otherwise, to any person other than Bidder or an associate, or forgo
any amount to which it would otherwise be entitled, in connection
with that a proposal by that person for:
(1) a takeover bid for, or scheme of arrangement proposed
by, Medusa, under the Corporations Act;
(2) the acquisition by that person or an associate of
substantially all the assets and operations of Medusa; or
(3) any transaction having a similar economic effect.
This section does not apply to a payment by way of remuneration for
professional services or to directors of Medusa for the discharge of
their duties in connection with the Offer.
(u) 90% minimum acceptance
Before the end of the Offer Period Bidder and its associates have a
relevant interest in at least 90% of Medusa shares.
Definitions
(a) In this annexure:
Announcement Date means 19 September 2008.
Encumbrance means an interest or power (whether existing or agreed to
be granted or created):
(1) reserved in or over any interest in any property,
including any retention of title; or
(2) created or otherwise arising in or over any interest in
any property under a bill of sale, mortgage, charge, lien, pledge,
hypothecation, trust or power,
and any other restriction on the use of or exercise of a right over
property, or on the registration of an interest in or dealing with
(including a transfer of) property.
Medusa Shares means fully paid ordinary shares of Medusa.
Offer Period means the period during which offers made under the
Offer remain open for acceptance.
Public Authority means any government or any governmental,
semi-governmental, statutory or judicial entity or authority, or any
minister, department, office or delegate of any government, whether
in Australia, the Philippines or elsewhere. It also includes any
self-regulatory organisation established under any statute and any
stock exchange.
(b) Capitalised terms appearing in this annexure, if not
defined in this annexure, have the meaning given to them by section 9
of the Corporations Act.
The above is an outline only. The full terms of the conditions will
be set out in the Bidder's Statement.
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