First Tin Shares Jump 20% on Metals X Takeover Approach

First Tin (LON: 1SN) shares jumped 20% on Friday after the tin developer disclosed an unsolicited cash proposal of 15p a share from its own shareholder, Metals X. The board said it received the indicative approach yesterday and is considering it.

The shares closed at 13.8p, up from 11.5p on Thursday and the highest close since the start of July. About 2.5 million shares changed hands, and the stock had closed between 11.5p and 12.2p over the previous four sessions.

In a statement at 11.28am, First Tin said the board, excluding the two Metals X nominees on it, is carefully considering the proposal with its advisers, and shareholders were told to take no action.

The announcement was made under Rule 2.4 of the Takeover Code, which also started a formal offer period.

Metals X confirmed at 2pm that its approach is a preliminary, non-binding indicative cash offer, with no certainty an offer will follow. It added that it has not yet been able to check whether parties acting with it have dealt in First Tin shares.

The 15p price is 30.4% above Thursday’s close and 8.7% above Friday’s. It would value First Tin at about £81.3m, against about £74.8m at the close. With the proposal non-binding, a close below 15p looks like doubt that a firm offer will follow.

The board has not said whether it would recommend the proposal, and stressed the uncertainty in its own statement:

There can be no certainty either that an offer will be made nor as to the terms of any such offer.

First Tin board

Metals X must announce a firm offer under Rule 2.7, or say it will not bid under Rule 2.8, by 5pm on the 6th of November. The Takeover Panel can extend that deadline.

Metals X has not disclosed its stake. Its opening position disclosure is due within 10 business days, by around the 23rd of October.