This web page has been developed to provide Golden West Resources Limited ("Golden West") shareholders access to detailed information supporting the REJECT recommendation by the Independent Directors in response to the bidder's statement received from Fairstar Resources Limited ("Fairstar").
TO REJECT THE OFFER, YOU TAKE NO ACTION. DO NOT FILL OUT ANY OF THE FORMS INCLUDED IN THE FAIRSTAR BIDDER'S STATEMENT.
If you require any further information, please have no hesitation contacting the Company's shareholder information line on: 1800 118 938 or 08 9386 2651. It is also recommended you fill out the details required to activate email information to be sent to you on any statement the Company issues regarding the Fairstar offer.
Fairstar's offer for all the shares in Golden West Resources Limited was first announced to the Australian Securities Exchange ("ASX") on 4 September 2007. A replacement bidder's statement was lodged by Fairstar with the Australian Securities and Investments Commission ("ASIC") on 26 October 2007. On 11 December, Fairstar varied its bid, and removed conditions from the offer.
Golden West has formally responded to the Bid in its Target's Statement, which has been posted to Golden West Shareholders. This is an important document which should be read by the shareholders before making a decision on the Fairstar offer. Golden West responded to the varied offer on 12 December, in an announcement to the ASX.
Golden West advises shareholders to seek personal tax advice regarding any potential personal tax issues.
The Independent Directors unanimously recommend that you REJECT the Offer from Fairstar.
In the opinion of the Independent Directors, the Fairstar Offer:
- undervalues Golden West;
- will significantly dilute Golden West shareholders' interests in the Wiluna West Iron Ore Project;
- does not offer access to any other substantial assets or increased capability within the combined entity;
- does not bring any meaningful cost synergies;
- will incur substantial costs that will deplete financial resources that could otherwise be applied to the development of the Project; and
- the varied offer does nothing to address any of these key concerns.
As there is no cash consideration included in the Offer, the value shareholders will receive for their Golden West Shares is uncertain and will depend on the future market performance of Fairstar Shares.
There is no guarantee that individual Golden West Shareholders will be able to realise the implied value of the Offer through selling Fairstar Shares acquired through this Offer on the market as the shares are not heavily traded. Any Fairstar shares issued to you upon acceptance will take up to 30 days to be issued - leaving you unable to trade during that time, and exposed to any adverse share price movements without means of exit.
The Board of Golden West has received significant support from its shareholders in rejecting this Offer. Golden West is seeking updated Irrevocable notices undertaking to reject the Offer, following the varied Fairstar Bid.
Based upon this level of shareholder support for rejection, Golden West believes it is unlikely that Fairstar will achieve an 80% interest in Golden West, and hence any Shareholders who accept this Offer will not qualify for scrip for scrip capital gains tax relief.
Shareholders who accept the Offer may therefore face significant tax consequences which they will have to meet personally, without receiving any cash proceeds under the Offer to assist in meeting this cost.
Shareholders who accept the offer will also be unable to participate in Fairstar's upcoming 1 for 15 Rights Issue, details of which can be found here.