Canada-based Mayfair Acquisition has announced its intention to launch a securities exchange takeover bid to acquire all issued and outstanding shares of Gold Basin Resources and Canex Metals in exchange for its common shares.
The move is being facilitated by Discovery Group, a collaboration involving mineral exploration and development companies.
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The proposed acquisition will potentially form a more robust gold exploration and development company by combining the precious metal assets of Gold Basin and Canex in northern Arizona.
Mayfair has outlined an equity financing strategy of between C$2m ($1.4m) and C$6m and a share exchange ratio that will result in a premium for Gold Basin shareholders.
The share exchange ratios will be determined based on the post-financing cash value of Mayfair and the rollback ratio.
Jim Paterson of Discovery Group has been appointed to Mayfair’s Board of Directors. Discovery Group representatives John Robins and Darren Klinck will join upon the successful completion of the bid.
Mayfair has not yet commenced the takeover bid. The announcement provides Gold Basin and Canex’s boards with additional time to consider the offer and explore strategic alternatives.
The bid’s acceptance by the TSX Venture Exchange is pending, and there is no guarantee it will be granted.
The proposed offer follows a history of unsuccessful engagement between Discovery Group representatives and Gold Basin’s management.
Despite previous recommendations for Gold Basin to pursue merger discussions with Canex, no action was taken, leading to a significant decline in Gold Basin’s market capitalisation.
Canex has shown interest in engaging with the proposal, but Gold Basin has yet to respond.
The lack of response is seen as indicative of Gold Basin’s management challenges, which have contributed to its financial difficulties.
The offer is contingent on several conditions including TSX Venture acceptance, lock-up agreements from key shareholders and compliance with securities laws.
The offer will also depend on the deposit of at least 90% of the total number of issued and outstanding shares of Gold Basin and Canex, among other regulatory and business conditions.
