Emmerson Resources (ASX:ERM) has entered a scheme implementation deed with Pan African Resources (LSE:PAF) for the latter to acquire the company for $311 million in an all-scrip deal.
Shareholders will receive 0.15 shares in Pan African for each Emmerson share held, implying an offer price of $0.45 per share.
The scheme consideration represents a 36.4% premium to Emmerson’s closing trade price of $0.33 per share on 6 March, as well as a 42.7% premium to the company’s 30-day volume weighted average price.
The completion of the acquisition will see Emmerson shareholders owning 4.24% of Pan African.
Pan will provide Emmerson with an interim unsecured loan to assist with cash calls with the Emmerson-Pan joint venture Tennant Creek Project in the Northern Territory.
Emmerson Chairman Mark Connelly says combining the company with its joint venture partner represents a “highly compelling and strategically logical consolidation of our Tennant Creek tenement package”.
“The transaction delivers our shareholders with an immediate value realisation event at an attractive premium, whilst providing exposure to a larger, more diversified and well-capitalised gold producer with a broad portfolio and a strengthened platform for long-term value creation,” Connelly says.
“We are excited about the future prospects of the combined group and the enhanced opportunities it will create for Emmerson shareholders.”
Emmerson Resources is an explorer focused on developing gold projects in the Northern Territory and New South Wales.
Write to Maddison Elliott at Mining.com.au
Images: Emmerson Resources
