Magellan will issue an exchange offer to acquire the remaining 44.87% of MPAL ordinary shares that it does not currently own.

Based on Magellan’s closing share price of US$1.93 on Monday, the offer values MPAL's 14.7 million outstanding shares at A$37.7 million.

Magellan chairman Walter McCann said the current shareholding structure of MPAL was not in the best interests for either company.

“We also believe that the existing ownership structure has not provided optimal benefits in transparency as to pricing or market understanding of MPAL’s assets, nor fostered liquidity or access to capital in either the US or Australia,” said McCann.

“We believe that a successful takeover will lead to a stronger company that will be better positioned to thrive in the current competitive atmosphere and to improve overall shareholder returns.”

A bidder’s statement will be filed with the ASX, the Australian Securities and Investments Commission in the near future, said McCann.

The conditional offer states that Magellan must acquire at least 90% of MPAL’s outstanding shares on or before the prescribed offer period, which is expected to remain open for at least eight weeks after issue of the bidders statement.

If successful, Magellan will request that MPAL is removed from the ASX.

The offer consideration involves seven newly-listed shares of Magellan common stock for each 10 outstanding MPAL shares.

Upon success, new Magellan shares will be issued to MPAL’s Australian shareholders as CDIs (Chess Depository Interests) to be listed on the ASX. This means that MPAL shareholders would collectively own about 36.3% of Magellan’s issued and outstanding shares.