Ailing firm shuns takeover lifeline

UNCERTAINTY surrounds a mining company that opted to fall into the hands of administrators rather than accept a takeover offer from one of its minority shareholders, in what is thought to be a UK first.

Aim-listed Asa Resource, which owns nickel, diamond and copper assets across sub-saharan Africa, had appointed administrators at Duff & Phelps on July 30 after running out of cash.

The company was under offer from Rich Pro Investments (RPI), an investment vehicle backed by Chinese businessman Feng Hailang. RPI, which owns a 4pc stake in Asa, offered $35.5m (£27.5m) to buy the whole company on July 12, a 65pc premium at the price that the shares were trading at prior to the bid.

However, RPI claims that Asa failed to engage with its offer, opting instead to put itself into administration, without explanation.

The Takeover Panel has ruled the firm is no longer in an offer period because insolvency rules supersede the Takeover Code.

It is thought to be the first time a company has entered administration while subject to a formal takeover bid. Normally, a board would accept an offer in order to protect shareholders’ investments.

A City source described RPI’S actions as akin to “blowing itself up rather than taking the money”.

RPI is still keen to buy Asa, and offered a $40m loan to keep it going. Asa couldn’t be reached for comment.