Silver Lake Resources launches late bid for St Barbara, spoiling Genesis Minerals’ Leonora play
Silver Lake Resources has launched a dramatic late intervention into St Barbara’s friendly asset sale deal with Raleigh Finlayson’s Genesis Minerals.
Silver Lake Resources has launched a dramatic late intervention into St Barbara’s friendly asset sale deal with Raleigh Finlayson’s Genesis Minerals, saying it has unsuccessfully been pitching a better proposal to the St Barbara board.
Silver Lake went public with its offer on Thursday, saying it had offered a deal worth $732m to acquire the struggling gold producer’s WA gold assets, including $326m cash and 327.1m of its own shares.
The WA miner says it believes its offer is superior to that of Genesis, offering a 28 per cent premium to the upfront value of the Genesis bid, which includes $370 million cash and $170 million worth of its shares and a 14 per cent premium to the full offer, which includes another $60 million contingent scrip payment in exchange for St Barbara’s Leonora assets.
Silver Lake says the St Barbara board has so far refused to engage with its offer, and claims to have the support of the struggling producer’s two biggest shareholders – L1 Capital and Baker Steel Capital Managers LLP, representing 9.3 per cent and 8.6 per cent of the St Barbara register respectively – to hold talks over the bid.
Under the Silver Lake proposal, St Barbara shareholders would emerge with 26 per cent of its stock, the company said.
Silver Lakes’ cash offer is below that of Genesis, and the amount of scrip on offer would force the commissioning of an independent expert review, potentially slowing the sale of St Barbara’s Leonora assets at a time when the company is struggling for cash.
In a statement to the ASX on Thursday, St Barbara said its board remained convinced the Genesis bid offered the best value to its shareholders, saying the Silver Lake premium was only 9 per cent above that of its rival when a $5.4m break fee on the Genesis deal was included in its price and pointing to the faster closure of the Genesis deal.
“Even if the required mutual due diligence could be completed within 2 weeks, Silver Lake has indicated that expected completion of a transaction would occur in mid/late August. This contrasts with the Genesis transaction which is expected to complete on or around 30 June 2023,” St Barbara said.
St Barbara also said its shareholders would benefit from the issue of Genesis shares given Genesis brings its own Leonora assets to the district consolidation play.
“Accordingly, St Barbara will not be further engaging with Silver Lake in respect of the non-binding, indicative and conditional proposal,” the company said.
Genesis said in a statement its board and management had worked with St Barbara for more than a year to work ways to make the most of their combined assets in the Leonora region, and the deal offered value to both sets of shareholders.
Silver Lake shares closed down 3c to $1.21 on Thursday, with St Barbara up 5c, or 7.8 per cent, to 69c and Genesis down 6.5c to $1.29.