Canada-based Silvercorp Metals (TSX:SVM) has restructured its takeover offer of ASX-listed OreCorp (ASX:ORR) to dodge a potential blocking move from Perseus Mining (ASX:PRU).
OreCorp and Silvercorp have scrapped a previously announced scheme implementation deed — under which Silvercorp was seeking full control of OreCorp — in favour of an off-market bid implementation deed.
As part of the new part-cash-part-scrip arrangement, Silvercorp has offered to buy all OreCorp shares it does not already own in return for 0.0967 Silvercorp shares and $0.19 per OreCorp share.
This values OreCorp at roughly $0.589 per share, or $276.5 million — an 8.5% increase from SilverCorp’s previous offer, which valued OreCorp at $0.543 per share.
The new potential deal marks a 40.1% premium to OreCorp’s 20-day volume-weighted average (VWAP) price for the period ending 4 August 2023, a 21.8% premium to OreCorp’s 20-day VWAP for the period ending 22 December, and a 15.5% premium to OreCorps’ last closing price of $0.51.
OreCorp’s board has recommended that shareholders accept the Silvercorp deal, which only requires a minimum acceptance of 50.1%.
However, while the new arrangement has increased the overall value of the Silvercorp offer, it seems it’s also part of a play to dodge a potential block from Perseus.
On November 27, just days after Silvercorp and OreCorp announced the updated scheme implementation deed, Perseus snagged a 19.9% stake in OreCorp. At the time, Perseus said it planned to vote against the Silvercorp deal.
Interestingly, Perseus said it was not in any discussions with OreCorp management over a potential takeover deal and it did not intend to submit a change of control transaction to compete with the Silvercorp offer.
In any case, OreCorp Managing Director and CEO Henk Diederichs today (27 December) says it became clear in recent weeks that the Silvercorp deal was at risk of not reaching completion, hence the new transaction structure.
“We believe this would have prevented OreCorp shareholders having the opportunity to receive a significant premium on their OreCorp shares and exposure to a company that is geographically diverse, with a strong balance sheet and solid mine-building and operational experience.
This new Silvercorp offer provides shareholders with a level of certainty, and the board believes this is an excellent outcome.”
“This new Silvercorp offer provides shareholders with a level of certainty, and the board believes this is an excellent outcome”
At this stage, OreCorp expects the Silvercorp offer to become open for acceptance on 3 January 2024.
OreCorp shares had spiked 13.73% to $0.58 as of 2:45pm AEDT. The company has a $239 million market capitalisation.
Perseus has made no comments since the announcement of the new Silvercorp-OreCorp arrangement.
Write to Joshua Smith at Mining.com.au
Images: OreCorp
