The board of both companies, which Jones chairs, decided not to proceed with the merger following due diligence and extensive feedback from Gindalbie and Sundance shareholders.
While both companies were tight-lipped on what the feedback was in relation to, The West Australian newspaper reported that shareholders were concerned about merging Sundance's underdeveloped Mbalam iron deposit in Cameroon and Gindalbie's advanced Karara iron ore project in the Mid-West.
This morning both companies said the due diligence remains subject to confidentiality provisions.
"Although I am disappointed with the decision of the respective boards not to proceed with the merger, I would like to express my full support for both boards and management teams, and my strong belief in the quality of the iron ore projects being developed by both companies," Jones said.
The merger was announced late last month and would have seen Gindalbie acquire all shares in Sundance in a two-for-one deal, with the shareholders in the former holding 35% interest in the combined entity.
Shareholders in Gindalbie were pleased with the news, with the company’s share price climbing 12% to a high of $1.66 this morning while shares in Sundance shed 10c or 13.7% to 63c.
