Amara vows to ease UK shareholder trading fears

SOME of Amara Mining’s UK shareholders may encounter problems holding shares in the firm once it merges with Perseus Mining, an Australia- and Toronto-listed gold business.

According to a Miningmx reader, who cited the advice of his broker Hargreaves Lansdown, Perseus Mining shares cannot be settled in the UK unless a depository interest is created.

For depository shares to be traded, in which one depository share would be equal to one Perseus share, a market would have to be created for Perseus shares in the UK.

Said Hargreaves Landsdown to its clients holding Amara shares: “It may be possible to trade Perseus Mining Shares on the Australian or Toronto Stock Exchanges. In order to do this you would need to first transfer the Shares into the Australian or Canadian Market”.

Said the reader in comments to a Miningmx article regarding the proposed merger of Amara with Perseus: “If this takeover is approved, I can’t see any option other than to have to sell – in my case at a loss”.

Asked whether certain UK shareholders would have difficulty trading their shares in the merged entity, Katharine Sutton, a spokeswoman for Amara, replied:

“Before the deal was announced, our financial adviser and nominated adviser did extensive research into whether UK brokers allow their customers to hold overseas-listed shares. We believed that they did, however it has since come to light that two brokers, Hargreaves Lansdown and Halifax, do not permit this.

“As a result, we have asked our nominated adviser, Peel Hunt, to look for a solution to this issue. We believe it is close to having found it and we will advise our retail investors of it as soon as it is confirmed,” she said.

Sutton added that Amara’s finance director, Pete Gardner, also holds Amara shares through Hargreaves Lansdown and was, therefore, “… in the same position as those of our retail investors experiencing this issue.

“We apologise unreservedly for any concern or inconvenience this has caused and will advise of the remedy to this problem as soon as possible,” said Sutton who added that Amara valued its retail investors very highly, especially for their loyalty in the last few years when gold equities have been under pressure.

Persesus Mining has said, however, that it would consider listing in the UK once the merger was completed. Amara Mining CEO, John McGloin, told Miningmx that the merger ought to be wrapped up by the middle of April.

Perseus Mining unveiled an all-scrip bid for Amara worth $85m on February 29. The logic for the merger – in which Perseus is offering 0.68 per new Perseus share and 0.34 of a Perseus warrant for every Amara share – is that the two companies can pool their resources in Cote d’Ivoire and Ghana.

The offer values Amara at 14.6 pence per share which at the time of the offer represented a 45% premium to its then trading price.