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  • As the dust settles on the Panoramic (ASX:PAN) and Independence Group (ASX:IGO) takeover scuffle, IGO has suddenly changed its tone
  • The company says it believes the value of its proposition has “eroded”
  • As such, IGO will let its takeover offer for Panoramic lapse in January
  • Panoramic, however, has remained confident in the value of its Savannah Nickel Project
  • Despite this confidence, Panoramic’s shares have dropped 22.5 per cent since Friday’s news, currently worth 31 cents each
  • IGO, on the other hand, has gained 2.4 per cent and is selling shares for $6.39 each

The dust has settled after the scuffle between Panoramic (ASX:PAN) and Independence Group (ASX:IGO) came to its end last week. How has the market responded now that it’s had time to process the news?

A strong Panoramic defence

The battle for Panoramic has been raging since November when IGO launched a hostile $312 million takeover of the nickel miner. Panoramic’s WA Savannah Nickel Project was the focus of IGO’s bid.

While the original offer — which was relaunched two weeks after Panoramic battered down the first attempt — valued Panoramic shares at 50 per cent premium, Panoramic would have none of it. In early December, the management team told shareholders the offer undervalued the company and suggested they vote “no” to the bid.

With the help of major shareholder Zeta Resources and Perth-based advisory firm Azure Capital, Panoramic stayed strong against the IGO onslaught.

Since then, however, Panoramic has undergone some board shuffling and capital raising, and suddenly IGO is chiming a different bell.

IGO’s change in tone

IGO announced on Friday that, due to some breaches in “a number of defeating conditions” regarding the bid, it has made the call to let the offer lapse on January 17, 2020.

Independence Group’s Managing Director Peter Bradford suggested Panoramic is perhaps not as valuable as the company originally thought.

“Any M&A must deliver a return to our shareholders. At announcement, IGO’s off-market takeover bid for Panoramic, which was based on the public disclosure of the 2017 Savannah Project feasibility study, represented a potential ‘win-win’ for both IGO and Panoramic shareholders,” Peter said.

“The subsequent disclosures by Panoramic, including the operational update and need for additional funding have significantly eroded the value proposition for IGO and its shareholders. Consequently, we have decided to allow the Offer for Panoramic to lapse. This decision reflects our disciplined approach to M&A,” he explained.

Still, the sudden change in tone begs the question: does IGO genuinely believe the value of the proposition has eroded or is this a “you can’t fire me, I already quit” situation to help keep IGO shareholders happy with management?

Panoramic unphased

Panoramic remained nonchalant in its response to IGO’s statement on Friday.

The company acknowledged IGO’s statement but didn’t include a statement from a Panoramic director. Rather, Panoramic suggested it still backs its bold move to reject the takeover and believes shareholders will see more value by sticking by Panoramic than they would under the IGO offer.

“The company remains highly confident in the strategic value of its Savannah Project and is focused on delivering the outcomes outlined in the Operational Review released on 4 December 2019,” Panoramic’s announcement to the market said on Friday.

The market’s response

Nevertheless, Panoramic’s confidence wasn’t enough to stop shares from shaving off a fifth of their value after IGO’s announcement.

After closing at 40 cents on Christma Eve, Panoramic shares slumped 21.25 per cent to close at 32 cents each on Friday afternoon. Today, the decline has continued as shares trade 3.12 per cent lower for 31 cents each at midday AEDT.

IGO shares, on the other hand, gained 4.57 per cent after dropping the Panoramic offer on Friday, closing at $6.52 each — the highest price since the offer was first launched in early November. Today, however, shares have dipped a slight 2.14 per cent and are worth $6.39 each at midday AEDT.

Though Panoramic won the battle versus IGO, only time will tell if the decision to resist was really a winning move.

PAN by the numbers
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