Capital sells entire shareholding in Predictive Discovery

14th Aug 2024 10:28

(Sharecast News) - Mining services company Capital Limited announced the sale of its entire shareholding in Predictive Discovery (PDI) on Wednesday, to Perseus Mining for a total cash consideration of AUD 47.3m (£24.42m).

The London-listed firm said the transaction involved the sale of 225,349,418 shares at 21 Australian cents each.

As part of the agreement, Capital and Perseus established a profit-sharing arrangement, under which any profit derived from a subsequent sale of the shares by Perseus to a third party before 31 December 2025 would be split equally between the two companies.

Additionally, the agreement provided Capital with certain options should Perseus initiate a takeover offer or propose a scheme of arrangement for PDI shares at a price greater than 21 Australian cents per share before the end of 2025.

In such scenarios, Capital said it would have the option to repurchase the shares at the original sale price, subject to certain conditions, or Perseus could cancel the call option by paying a cash fee to Capital equal to the premium offered.

Perseus indicated that it was not currently engaged in any discussions with PDI, and had no immediate plans to acquire control or make a takeover offer for the company, barring any significant changes in PDI's shareholding or actions.

Capital said it decided to sell its stake in PDI to reallocate funds into its broader business, with a focus on reducing debt levels.

The company's board believed the sale was in the best interest of shareholders.

Jamie Boyton, Capital's executive chairman, recused himself from all transaction negotiations and board voting on the sale due to a conflict of interest.

He also sold his personal holdings in PDI to Perseus under the same terms as the company's transaction.

"Predictive Discovery has been an excellent investment for Capital, as well as an excellent client for Capital's drilling business," said chief executive officer Peter Stokes.

"As Predictive moves towards permitting and then construction, we see this as the right time to recycle this investment back into the broader business, particularly to lower the group's debt levels."

At 1018 BST, shares in Capital Limited were up 4.71% at 89.63p.

Reporting by Josh White for Sharecast.com.