ISS recommends Karora shareholders vote for proposed Westgold merger

‘Westgold 3.0’ takes shape as ISS recommends Karora shareholders say yes to merger

Advisory firm Institutional Shareholder Services (ISS) has recommended Karora Resources (TSX:KRR) shareholders vote in favour of the merger with Westgold Resources (ASX:WGX) at an upcoming meeting on 19 July 2024. 

ISS says the arrangement carries sound strategic logic as the combined company is expected to deliver “meaningful cost synergies, benefit from scale, and a stronger financial position, and be more diversified”.

In early April, Westgold announced its plans to merge with Karora and create a  pro-forma market capitalisation of $2.4 billion, plus 400,000-ounce-per-year Australian gold miner. 

Under the initial proposal, Westgold is offering Karora shareholders 2.524 shares, $0.68 in cash and 0.30 of a share in the new company to be demerged from Karora, for each Karora share held. 

On 29 May, the Australian Government’s Takeovers Panel received an application from Ramelius Resources (ASX:RMS) in relation to the affairs of Westgold seeking orders in relation to the standstill restrictions contained in a mutual confidentiality deed between both parties. 

The deed included a mutual standstill for a period of 12 months, ending on 14 November 2024. 

However, the panel accepted undertakings from Westgold and Karora and declined to make a declaration of unacceptable circumstances in response to Ramelius’ applications. 

Westgold announced on 8 July that the Karora transaction has been unanimously approved by the board of directors from both companies. 

Westgold CEO Wayne Bramwell says once completed, the transaction will bring a complementary team and assets to establish Westgold 3.0. 

“Westgold 3.0 will be a large, unhedged, well-funded owner operator that is fully leveraged to the gold price,” he says. 

“With unparalleled organic growth and exploration upside across two strategic West Australian goldfields and a team that has demonstrated the ability to deliver consistent shareholder returns, the value proposition of the expanded business will have enhanced international appeal.”

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Images: Karora Resources
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Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.