Australian gold producer Silver Lake Resources has revised its indicative proposal to purchase St Barbara’s Leonora assets in Western Australia, for A$707m ($479.56m).
Under the revised offer, St Barbara shareholders are expected to receive A$326m in cash and 327.1 million shares of Silver Lake, worth A$381m.
Earlier this month, St Barbara has rejected Silver Lake’s previous offer of A$732m, citing lack of synergies and a lower cash component, and backed Genesis Minerals’ A$600m bid.
Silver Lake said that its the revised bid will enable St Barbara to retain 7.5% or 94.8 million shares upon completion of the transaction.
It would provide the company with around A$111m in additional liquid assets, to fund its working capital requirements post-completion of the proposed transaction.
Silver Lake managing director Luke Tonkin said: “We’ve listened to the concerns of the St Barbara Board aired publicly about our original non- binding proposal to buy the Leonora Assets and have addressed them.
“By separating the issuance of the Silver Lake scrip component to St Barbara and its shareholders, we have shortened the time to completion and increased the liquidity available to St Barbara.
“The total consideration remains 27% higher than the consideration being offered by Genesis and provides incoming St Barbara shareholders with significant exposure to a genuine mid-tier gold producer with a diversified and complementary portfolio of production, expansion, development and exploration assets.”
Silver Lake said that its revised proposal is 27% premium to its competitor Genesis’ bid, based on the respective disturbed VWAPs, since Silver Lake’s original proposal.
Also, it is 24% premium at last closing prices, excluding the contingent consideration component of the Genesis Transaction given that its receipt is uncertain.
Silver Lake said that its revised bid is fully funded, and provides St Barbara with adequate cash to fully refinance its publicly stated debt, upon completion of that transaction.
Also, the proposal also includes a A$25m working capital facility to help St Barbara manage its working capital requirements until completion of the transaction.
Silver Lake intends to fund the transaction using A$268m in cash and a $150m credit approved debt facility, to be provided by Taurus Mining Finance Fund No 2.
