AIC Mines has executed a Bid Implementation Deed to improve its offer price to acquire the Australian exploration and mining services company Demetallica.
In September this year, the company initially offered one share of its common stock in exchange for 1.5 Demetallica shares, which Demetallica had rejected citing undervalue.
Under the current agreement, AIC Mines has increased its offer price to exchange one share of AIC Mines for 1.3 Demetallica shares held.
The improved bid represents an implied price of around $0.391 per Demetallica share, based on the last closing price of AIC Mines on 19 September 2022.
Unanimously agreed and recommended by the Board of Demetallica, the improved offer is unconditional and its closing date will be extended to 28 November 2022.
The recommended offer follows a constructive engagement period between the companies, and is considered best and final and will not be increased.
AIC Mines managing director Aaron Colleran said: “Combining AIC Mines and Demetallica is a logical consolidation and unlocks significant value for both AIC Mines and Demetallica shareholders.
“I look forward to working with Andrew to efficiently close the transaction and integrate the Demetallica assets, people, and knowledge base with AIC Mines. This is a great outcome for everyone involved.”
The transaction will create a combined, growth-oriented mid-tier Australian copper and gold mining company, which will deliver strong benefits for shareholders of both companies.
A group of seven shareholders who collectively own 24.4% of Demetallica, have accepted the improved offer made by AIC Mines.
AIC Mines already owns around 10.2% stake in Demetallica, and Demetallica shareholders will own around 21% of the combined company.
Demetallica and AIC Mines have agreed to facilitate the optimal business combination, where AIC Mines will advance the processing of Demetallica shareholder acceptances into AIC Mines shares.
Argonaut PCF served as a financial advisor and HopgoodGanim as a legal advisor to AIC Mines on the transaction.
ICA Partners served as a corporate advisor, Euroz Hartleys as a corporate broker and Steinepreis Paganin as a legal advisor to Demetallica.
Demetallica managing director Andrew Woskett said: “We are pleased to have reached commercial agreement with AIC Mines such that both AIC Mines and Demetallica shareholders can enjoy the synergies this consolidation can deliver.
“Given the uniqueness of the situation, in terms of the assets so plainly being worth more together than they are individually, we have strong support for the transaction from a large number of our shareholders, and expect similar support from the market more broadly as it understands the robust long-term copper-gold producer this creates.
“I am extremely proud of the exploration team I have around me, moving quickly to elevate the prominence of Jericho as one of Australia’s most exciting copper-gold growth projects, as demonstrated by the recent MRE and new Exploration Targets outlined for Jericho.”
