Regis Resources (ASX:RRL) has withdrawn from the race to acquire Vault Minerals (ASX:VAU), clearing the way for Genesis Minerals’ (ASX:GMD) takeover of the Australian gold producer.
The decision follows Genesis’ $5.6 billion proposal last week, which Vault’s board determined as superior to the all-scrip offer lodged by Regis in May.
Under the proposal, Vault shareholders would receive cash and shares worth $5.274 per share, representing a 15.7% premium to the company’s closing share price before the offer emerged and almost 6% more than Regis’ bid.
If completed, the transaction would create one of Australia’s largest listed gold producers, with a pro-forma market capitalisation of about $12.6 billion and annual gold production of up to 700,000 ounces.
The merger would also combine neighbouring operations across Western Australia’s Goldfields, including Vault’s King of the Hills mine and Genesis’ nearby assets, creating a business with five operating mines and shared processing infrastructure.
Regis says its board has decided not to submit a matching proposal after determining the terms required to compete with Genesis do not meet the company’s investment and return thresholds.
“The terms that would be required to match the Genesis proposal do not meet the value and return thresholds that Regis applies to all growth opportunities,” the company says.
Vault notes it intends to terminate its scheme implementation agreement with Regis and enter into a definitive agreement with Genesis.
The termination will trigger a break fee of about $50.7 million payable to Regis.
Genesis says its proposal remains unchanged and is open for acceptance once the Regis scheme is formally terminated.
Regis Resources is one of Australia’s largest unhedged gold producers, with more than a decade of consistent production and reserve growth. Vault Minerals is a mid-tier gold producer with a diversified portfolio of operating mines across Western Australia.
Write to Jackson Chen at Mining.com.au
Image: Vault Minerals
