Larvotto Resources Ltd. has defended its takeover agreement with Hammer Metals, downplaying a rival offer from Austral Resources as ‘incomplete and conditional’.
The response follows an announcement that Austral had approached Hammer with a competing proposal.
However, Larvotto pointed out that the rival bid failed to determine a fixed share exchange ratio, leaving the future ownership stake of Hammer shareholders entirely undetermined.
Larvotto executed a formal Scheme Implementation Deed with Hammer on June 11 for a scrip-based combination of the two entities.
Because Austral’s counter-offer is currently non-binding and incapable of acceptance, the Hammer board maintains its unanimous recommendation that shareholders vote in favour of the original Larvotto transaction.
Consequently, Larvotto’s contractual five-day matching right has not yet been triggered.
In a bid to reinforce the value of its existing offer, Larvotto highlighted its robust balance sheet and imminent transition to producer status.
The company is on the verge of commissioning its flagship Hillgrove high-grade gold and antimony project in New South Wales.
Once operational, Hillgrove will position Larvotto as Australia’s largest producer of antimony, accounting for approximately 7 per cent of global supply.
The critical infrastructure metal is a key focus of the federal government’s AU$1.2 billion Critical Minerals Strategic Reserve.
Financially, Larvotto remains heavily capitalised. The company reported AU$81.7 million cash at bank at the end of March, with a further AU$52.2 million in funding successfully drawn down in June. Additionally, a major global commodities firm has committed to inject $15 million into the company at a 15 per cent premium once the Hammer merger becomes effective.
Larvotto also noted its market presence dwarfs that of its rival. Based on recent trading, Larvotto’s market capitalisation sits at AU$662 million, nearly four times greater than Austral’s AU$175 million footprint.
Larvotto shares also offer far greater trading liquidity, averaging AU$3.05 million in daily ASX turnover compared to Austral’s AU$900,000 per day.
Larvotto reiterated that its offer for Hammer under the Larvotto SID remains a compelling proposition for shareholders of both Hammer and Larvotto.
