Silvercorp Metals is likely to complete its acquisition of major mine developer OreCorp in an off-market takeover offer despite a rocky start.
The companies have agreed to terminate the previous scheme implementation deed commenced in August, and enter into a bid implementation deed.
The new deed will see Silvercorp acquire OreCorp shares for consideration comprising 0.0967 common shares of Silvercorp and $0.19 cash per OreCorp share, four cents higher per share than the previous offer.
The company said the offer aims to create a geographically diverse mid-tier precious metals company with a robust growth pipeline.
“We are delighted to have reached this position with Silvercorp,” OreCorp chief executive officer and managing director Henk Diederichs said.
“It became clear in recent weeks that the proposed scheme was at risk of not proceeding to completion.
“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.”
In early November 2023, the Tanzanian Fair Competition Commission (FCC) granted Silvercorp unconditional merger approval for the acquisition of OreCorp under the previously proposed scheme of arrangement.
Since the new agreement between the companies, the FCC has indicated that it will need the opportunity to consider the change of circumstances between the scheme of arrangement and the offer and new merger approval may be required.
OreCorp and Silvercorp have lodged the relevant documentation seeking the required approval from the FCC, but if approval is not granted the offer will not be able to be completed.
But both companies are confident in the likelihood of their success.
“The parties have been through the FCC approval process during the scheme of arrangement and have a positive working relationship with the FCC, as well as relevant government authorities,” OreCorp said.
Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.
