Allied Gold Mining in merger with Australian miner
Shares in Allied Gold Mining rocketed almost 64 per cent on Friday after the mining company announced that it and fellow miner St Barbara plan to form a one billion dollar mid-tier miner by merging, in the largest deal of its kind since late 2010.
Shares in Allied Gold Mining rocketed almost 64 per cent on Friday after the mining company announced that it and fellow miner St Barbara plan to form a one billion dollar mid-tier miner by merging, in the largest deal of its kind since late 2010.
Under the agreement, St Barbara will acquire the entire issued and to be issued ordinary share capital of Allied Gold, and shareholders will be entitled to receive A$1.025 in cash and 0.8 St Barbara consideration shares for each Allied Gold share held.
The offer values the capital of Allied Gold at around £360m and each share at 176p, which represents a premium of approximately 92.3% over the closing price of 91.5p per Allied Gold share on June 28th.
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Both firms have said they believe that the combination has a "clear strategic and financial rationale, is value enhancing, and provides benefits for the shareholders of the enlarged group".
The move is aimed at reducing the investment risk profile through a more diversified asset portfolio, save costs, and have the largest gold reserves and resources portfolio of any mid-tier ASX listed peer company.
St.Barbara, which last year failed to takeover Catalpa Resources, is one of the largest mid-tier Australian gold miners and has three mines and two processing plants at Leonora and Southern Cross, in the Eastern Goldfields region of Western Australia, and over 5,000km2 of prospective tenements across Australia.
So far, 54% of Allied Gold shareholders have backed the merger, which is set to be completed by late Augst or early September.
Mark Caruso, Chairman and Founder of Allied Gold, said: "The board of directors of Allied Gold unanimously supports the transaction and believes it to be a unique transformational opportunity with the potential to realise an immediate premium for shareholders.
"The transaction has the certainty of cash consideration coupled with an equity component to enable participation in the significant upside potential of the combined group.
"The investment attraction of the merged group is compelling, being one of the largest production and resource/reserve based mid-tier ASX listed gold companies, with a diversified portfolio of quality assets operating in multiple regional jurisdictions. The combined group will have a declining cost profile and exciting growth potential through near-term project development and exploration upside."
Allied Gold's share price rose 62.57% to 148.75p by 12:43.
NR
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