The transaction values Merlin Diamonds at A$59.4m ($61.5m) wherein Innopac has agreed to offer 1.67 Innopac shares for each Merlin Diamonds share.
The offer price of $0.28 a share represents a 36.59% premium over Merlin’s closing price on 30 January 2013.
In the absence of a higher bid, the directors of Merlin Diamonds have unanimously recommended approval of the transaction.
Innopac managing director and CEO Wong Chin Yong noted that the takeover was consistent with the company’s objective of enhancing shareholders’ value.
"Merlin Diamonds, with its advanced exploration tenements and its Merlin Diamond Mine Project’s imminent production is the only diamond mine in the Northern Territory of Australia and eventually in Australia.
"Upon completion, Innopac will be the first and only diamond miner listed in Singapore and probably in Asia," Yong added.
The acquisition enables Innopac to foray into the exclusive diamond and gems industry.
Merlin Diamonds executive chairman, MD and CEO Joseph Gutnick remarked that with Innopac’s financial backing, the company can accelerate development at the Merlin Project.
"The Merlin Project has a high proportion of gem-quality diamonds 65% of production is gemquality, compared to an average of just 20% gem-quality diamond production at diamond mines worldwide," Gutnick added.
The Merlin Diamond Project is located in Northern Australia and is expected to begin commercial production in Q3 of 2013.
