Goldway’s bid for MC Mining continues to stir controversy

MC Mining is a coking coal miner. File photo

MC Mining is a coking coal miner. File photo

Published Apr 9, 2024


Tawanda Karombo

Goldway Capital Investment’s bid to acquire South African thermal and coking coal miner MC Mining is now unconditional, after it received acceptances from the majority of the other shareholders in the target company.

Goldway yesterday said thatabout 83.67% of shareholders in MC Mining had already given assurances of their support for the US company’s acquisition bid.

“Goldway is pleased to announce that it has received acceptances from MCM shareholders representing 83.67% of the issued capital of MCM,” the company said.

Shares in MC Mining ended the day 5.26% stronger on the JSE at R2, though the company’s stock was 5.56% stronger in the past three months comparative.

The acquisition transaction had sparked off a bitter dispute between the US-based Goldway and MC Mining.

The board of directors of MC Mining, which was opposed to the acquisition bid, yesterday also accused Goldway of releasing misleading information in a bid to sway shareholders in favour of its acquisition move.

Goldway has put up an A$0.16 (R1.97) off-market offer for all of the shares it does not currently hold through a subsidiary in MC Mining, formerly Coal of Africa, and which owns South African coal properties.

It explained that as a consequence of the assurances by other shareholders in MC Mining, the condition requiring acceptances of at least 50.1% or more of the MC Mining shares had been defeated.

According to its third supplementary bidder’s statement dated March 21, 2024, Goldway has undertaken to waive all other defeating conditions to the deal that have not yet been fulfilled.

Goldway has now declared its offer “free from all defeating conditions”, and highlighted that “the offer is now unconditional” and will remain open for acceptance until April 22.

Last month, the independent board committee (IBC) of MC Mining “unanimously” recommended that shareholders “do not accept” the offer by Goldway after an independent expert advised that the offer was “neither fair nor reasonable” for the target company.

“The IBC believes that shareholders should have more regard to the independent expert’s report than the misleading valuation statements made by Goldway, which is neither an expert nor independent,” said MC Mining.

BDO Corporate Finance acted as the independent expert for MC Mining whose value it assessed between A$0.214 and A$0.356 prior to the offer by Goldway.

MC Mining, based on advice from the BDO Corporate Finance report, prefers a valuation of A$0.285 per share on a controlling interest basis.

As a result, this has sparked the bitter dispute between the directors at MC Mining and Goldway.

In a statement, MC Mining chairman Nhlanhla Nene and independent non-executive director Khomotso Mosehla said Goldway’s statements in its second and third supplementary bidder’s statements had falsely claimed that the Vele Aluwani colliery (Vele) was under care and maintenance, and that shareholders faced imminent risk of insolvency from this.

“These statements are inaccurate and there has been no change in the status of the assets or financial position of MCM which were considered by the independent expert,” they said.

“The independent expert has confirmed to MCM their valuation approach and findings and that no changes are required to be made to either the independent expert’s report.”

The MCM independent board committee has also challenged the valuation of the company by Goldway, saying the company is not an “independent valuation” expert as it has “vested interests” in justifying its views on appropriate valuation.

MC Mining had also said if Goldway had failed to reach a combined relevant interest of 82.19% by April 5, 2024, its offer acceptance condition would not be satisfied, and the offer period will not be extended by a further 10 business days.