Eskdale Petroleum, a wholly-owned subsidiary of Crosby Capital, has agreed to make the conditional cash offer, valuing Orchard at around $175 million on a fully diluted basis.
This compares to Eskdale’s initial unsolicited offer of 68c per share announced on October 2.
The Orchard board has unanimously recommended shareholders accept Eskdale’s amended offer in the absence of a superior proposal.
The Melbourne-based company today said each of its directors, who have interests in about 7% of Orchard, intend to accept the offer for their own holdings.
“The board has recognised that Orchard’s growth opportunities may be achieved more quickly if it is part of a larger group with greater financial resources, thus resolving ongoing funding requirements for Orchard’s development and exploration program,” executive chairman Steve Graves said.
“We believe that the certainty of cash today at a premium to market is in the best interests of all Orchard shareholders.”
Eskdale has an interest in about 23.78 million Orchard shares, representing 11.89% of the total issued shares and 10.89% on a fully diluted basis.
Hong Kong-based Crosby Capital Partners have developed a predatory reputation of late having recently made a hostile bid for uranium company Marathon Resources at 68c per share.
Crosby was also involved in a nine-month battle for Tethyan Copper, missing out when Chilean copper miner Antofagasta trumped its final bid of $1.35 per share with $1.40.