The board of Helix Resources Ltd (ASX:HLX) has advised shareholders to take no action in response to a proportional off-market takeover offer received from Acta Investment Group Pty Ltd.
Helix has received a Bidders Statement from Acta, which is seeking to acquire 25% of the company at $0.005 per share, an offer the HLX board has described as unsolicited and highly conditional at this time.
In a statement in response to the offer, Helix said: “The Helix board has significant concerns about the implications of this offer for shareholders and the future direction of the company.”
Board concerns
It lists the following concerns:
Control without a premium - Acta's offer aims to acquire 25% of Helix shares but the proposal includes a condition that a majority of the directors on the board of Helix are nominees of Acta or its associates.
“If successful, this would give Acta effective control of the company with a relatively small shareholding (~16%), without paying the standard control premium that shareholders would expect in such a situation.”
Onerous conditions - The offer includes restrictive conditions, such as limiting Helix from making any material expenditure above $50,000, which conflicts with the company’s current exploration objectives and drill programs.
“These conditions risk hampering the company’s ability to operate effectively and to continue the exciting copper-gold exploration projects that are underway in the Cobar region.”
No long-term commitment - Acta and its associates, including Michael Povey, have only recently become substantial shareholders and Acta itself was formed as a special-purpose vehicle in July 2024.
“Their limited track record with Helix and lack of transparency about their long-term strategy raises further concerns about their true intentions for the company.”
Limited or no information on proposed directors - Acta has only provided very limited information on Michael Povey and no information on the two other nominees in the Bidder’s Statement.
“The board reiterates the view outlined in the recent corporate update letter that the proposed directors do not add to the effectiveness of the board to execute strategy and would simply increase director’s fees.”
Commitment to shareholders
In the statement, Helix’s board reiterated its commitment to shareholders.
"The existing board believes that the company is potentially 'one drill away' from a new discovery, as highlighted by recent exploration successes at Collerina, Muriel Tank and Bijoux.
"The current board has the necessary expertise and vision to execute the company's strategy, which we believe will deliver long-term value to shareholders.
"We are committed to maintaining the course and maximizing returns from our copper and gold projects."
The board has also reiterated its recommendation to take no action regarding Acta’s offer.
"We will provide a detailed response in our forthcoming Target’s Statement, which will outline the board’s formal recommendations and provide further insights into the offer."