Australian firm Cannon Resources has received an off-market takeover offer worth A$45m ($29m) from a unit of critical minerals-focused private equity fund Kinterra Battery Metals Mining Fund.

In this regard, Cannon signed a bid implementation agreement with Kedalion Nickel, a fully owned arm of Kinterra Battery Metals Mining Fund.

Kinterra Battery’s offer includes the acquisition of all the remaining shares of Cannon Resources for A$0.45 ($0.29) apiece in cash.

This proposal marks a 43% premium to Cannon Resources’ last closing price of 31.5c per share and a 58% premium to its 30-day volume-weighted average price.

Cannon Resources’ board has confirmed its intention to accept the proposal and also recommended its shareholders accept it in the absence of a superior offer.

Currently, Kinterra has a 19.99% stake in Cannon Resources, having reached pre-bid acceptance agreements with some of the latter’s shareholders, including its largest shareholder Ponderosa Investments, based on several conditions.

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Nickel exploration and development company Cannon Resources is focused on two core projects in Western Australia, namely the Fisher East and Collurabbie projects.

The Fisher East project comprises four nickel sulphide deposits, which include Musket, Cannonball, Camelwood, and Sabre, located in close proximity to each other.

Cannon Resources chairman Alex Passmore said: “Kinterra’s offer creates an excellent opportunity for Cannon shareholders to realise value for their investment whilst moving the asset to Kinterra who can take Fisher East to the next stages of development.

“Fisher East is at an inflection point and this transaction removes the risks and equity dilution associated with the next phase of intensive project development work.”

Kinterra has also made up to A$1m available in a short-term loan facility available to Cannon Resources to support its funding needs during the offer period.

Cannon Resources can withdraw this facility at its discretion, depending on certain conditions.