Bannerman Resources Limited (TSE:BAN) (PINK:BNNLF) share price flew up on Monday, extending the prevailing uptrend and gapping up on an acquisition proposal.
BAN gapped up 25.6% on Monday on a trading volume of 1.18 million, which was more than 4 times above the average of 272 thousand.
Traders got excited when Bannerman received an acquisition proposal from Hanlong Mining Investment Pty. Ltd., a subsidiary of Chinese conglomerate – Sichuan Hanlong Group. The preliminary offered acquisition price is $0.648 per BAN share.
The announcement stated Hanlong is looking into Bannerman mainly for its Etango Uranium Project in Namibia.
Shareholders are offered a serious premium to the prevailing market price. Stocks usually closely follow the proposed pricing in cases of acquisitions, but this time the deal is complicated and there are many factors still to be considered. The offer is highly conditional – Hanlong wants a three-month period of exclusivity, which Bannerman doesn‘t intend to grant without an agreement on the price and clear conditions of the proposal in general.
Among other obstacles, the proposal is a subject to due diligence completion by Hanlong, approvals of Chinese and other regulators, including stock exchanges, support of Bannerman board, management and major shareholders.
