Northern Star Offers AU$150 Million for Remainder of East Kundana JV

Northern Star (ASX:NST) has offered AU$150 million to acquire the remaining 49-percent stake in the East Kundana joint venture (JV) located in Western Australia, the company announced on Tuesday (November 13).

The 49-percent interest in East Kundana is currently held in a JV investment between Tribune Resources (ASX:TBR) and Rand Mining (ASX:RND), both of which Northern Star has interest in.

“The AU$150-million price offers compelling, up-front value to Tribune and Rand. The cash offer to acquire the asset is a direct and clear means for Tribune and Rand shareholders to unlock the value of their company’s interest,” stated Bill Beament, executive chairperson.

The action to acquire this stake in East Kundana comes from Tribune and Rand facing a declaration of unacceptable circumstances from the Takeovers Panel in connection with past and present breaches of the Corporations Act, in regards to non disclosure of controlling shareholdings.

Northern Star stated that it believed that the AU$150-million offer for the Kundana JV interest was a “fair” and sensible outcome for both the Tribune and Rand shareholders following the panel’s declaration.  

“This combination of factors makes our offers a fair and simpler and more transparent opportunity for Tribune and Rand shareholders than alternative pathways,” Beament noted.

Northern Star’s overall acquisition plan includes the miner purchasing Tribune’s 36.75-percent stake in the JV for AU$112.5 million, while buying Rand’s 12.25-percent interest for AU$37.5 million in cash.

The miner notes that the offers are not inter-conditional and in order to complete the transactions, all will need to be approved by the shareholders and will also be subject to Ministerial approval.

Northern Star revealed to all shareholders that the company was fully financed to proceed with one or both of the transactions, subject to the satisfaction of the condition.

The transaction is expected to close by the end of January 2019.

Following the announcement, shares of Northern Star were down 2.44 percent and as of 11:03 a.m. EST on Tuesday (November 13), the company was trading at AU$8.39.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.