Insights

Why the Minotaur Exploration (ASX:MEP) share price is rocketing 46% higher

This mineral exploration share is rocketing on Wednesday…
The post Why the Minotaur Exploration (ASX:MEP) share price is rocketing 46% higher appeared first on The Motley Fool Australia. –

The Minotaur Exploration Ltd (ASX: MEP) share price has been an exceptionally strong performer on Wednesday.

In morning trade, the mineral exploration company’s shares are up 46% to 19 cents.

Why is the Minotaur Exploration share price rocketing higher?

Investors have been bidding the Minotaur Exploration share price higher today after it revealed plans to merge with Andromeda Metals Ltd (ASX: ADN).

According to the release, the two parties have entered into a bid implementation agreement (BIA), pursuant to which Andromeda will acquire Minotaur by way of an off-market takeover offer.

Andromeda has offered 1.15 Andromeda shares for every Minotaur share. Based on a five-day volume weighted average Andromeda share price of 18.1 cents, this implies a value of $0.208 per share.

This represents a 59.8% premium to the Minotaur Exploration share price at yesterday’s close and values the company at $108 million.

Why merge?

The release explains that once fully implemented, Andromeda will consolidate 100% ownership of both the Great White Kaolin Project and the Natural Nanotech business via the acquisition of Minotaur’s current 25% and 50% respective joint venture interests.

Management believes this will deliver a simplified and streamlined ownership and will enable the design, funding mix and timetable for the development of the Great White Kaolin Project.

It will also enable enhanced development and commercialisation of any future intellectual property from Natural Nanotech. This includes any new technology created for halloysite applications and uses, such as battery technology, water purification, and carbon capture

The Minotaur Board of Directors and several of Minotaur’s largest shareholders intend to accept the offer. The Board also unanimously recommends that shareholders do the same. This is in the absence of a superior proposal.

Demerger

In addition, Minotaur revealed that it intends to demerge its existing copper and gold exploration assets through its subsidiary, Breakaway Resources.

This will be undertaken via a pro-rata in specie distribution of Breakaway shares to Minotaur shareholders.

Management notes that the demerger enables Minotaur shareholders to retain full exposure to the value and the potential upside of these assets and the benefit of Minotaur’s highly credentialled board and management team in a clearly focused exploration company which is intended to be listed on the ASX.

Despite today’s gain, the Minotaur Exploration share price is now actually only trading flat in 2021.

The post Why the Minotaur Exploration (ASX:MEP) share price is rocketing 46% higher appeared first on The Motley Fool Australia.

Should you invest $1,000 in Minotaur right now?

Before you consider Minotaur, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Minotaur wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

The Andromeda (ASX:ADN) share price is sliding 10% today. Here’s why

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!