Genesis Minerals has sweetened its bid for St Barbara’s Gwalia gold mine
Silver Lake Resources remains out in the cold after Genesis Minerals sweetened its bid for St Barbara’s WA gold assets.
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Genesis Minerals has bumped its offer for St Barbara slightly and pulled forward contingent payments in a move to stave off Silver Lake’s late ambush of its friendly deal to consolidate the Leonora gold district.
The Raleigh Finlayson-led company has put an extra 5 million of its own shares on the table as part of a revised offer for St Barbara’s Gwalia mine and associated West Australian assets, as well as bringing forward another 52.2 million shares on offer for the company’s Tower Hill deposit – formerly contingent on the first production from the project.
The bump appears firmly aimed at shoring up support from those of St Barbara’s institutional shareholders who may not have been keen at having to wait to receive the full value of the transaction – two of whom, Baker Steel and L1, had previously indicated support for St Barbara to engage with Silver Lake over the WA company’s first offer.
Given a slump in the Silver Lake share price last week, St Barbara said Genesis’s revised offer was enough to keep the company at the front of the proposed deals on offer.
With Silver Lake shares closing at $1.015 on Friday, St Barbara said the total value of its bid – of $326m cash plus 327.1 million shares (worth $332m on Friday), for a total valuation of $614m – was not enough to trigger the “fiduciary out” provisions with Genesis.
Genesis’s total offer under the revised deal, as of Friday, was worth $604m – including $370m in cash and 205 million Genesis shares, worth $261m on Friday.
In addition, the Leonora consolidation hopeful has put up $25m in cash into an escrow account, which it would forfeit if its own shareholders do not approve the deal later this year.
Only half of both sets of shareholders attending twin meetings need to approve the deal for it to go ahead, suggesting only a knockout return from Silver Lake would be enough to shake loose support for Genesis’s latest offer.
While Genesis’s bid still sits slightly below that of Silver Lake’s, St Barbara said on Monday the 2 per cent premium was now “immaterial” and certainly offered by the Genesis agreement – compared to Silver Lake’s non-binding and indicative proposal, still subject to a two-week due diligence process – still made it the best bet for the company’s shareholders.
“In the current circumstances and taking account of the matters outlined above (and others), St Barbara is not entitled to engage with Silver Lake in respect of the non-binding, indicative and conditional proposal,” the company said.
“The St Barbara board will not intentionally breach the ‘no talk’ and ‘no due diligence’ obligations under the revised transaction agreement, which would give rise to a Genesis termination right. St Barbara has no expectation that Genesis or Genesis’s committed investors would provide a release from St Barbara’s binding exclusivity obligations.”
St Barbara is expected to set a meeting date and release the scheme documents this week.
St Barbara rose 2c, or 3.1 per cent, to 65c, with Genesis down 2c, or 1.6 per cent, at $1.255. Silver Lake rose 7.8 per cent to $1.095.
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Originally published as Genesis Minerals has sweetened its bid for St Barbara’s Gwalia gold mine
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