Sylvania Resources (ASX/AIM: SLV) has today increased its takeover offer for all the ordinary shares in Great Australian Resources Limited (ASX: GAU) to 1 Sylvania share for every 12 Great Australian Resources shares.
Investors liked the increased offer and potential merged entity, bidding the GAU price up by 68% and the Sylvania share up by 4%.
Based on today's price, the offer is worth 12.9 cents per share to GAU shareholders which is a very healthy premium compared to the GAU share price of 9.6 cents.
Sylvania had previously offered 1 Sylvania share for every 18 Great Australian Resources shares in May 2009.
In May, Sylvania also announced an intention to make an off-market takeover offer for all of the ordinary shares in SA Metals Limited (ASX: SXM) (formerly Pan Palladium Limited (ASX: PPD).
For Sylvania shareholders, the two takeover targets may offer compelling synergies. They would meld the company's tailings retreatment operations and shallow mining exploration interests located on South Africa’s PGM-rich Bushveld Igneous Complex in South Africa with GAU's platinum projects and exploration activities within the Bushveld Complex. SA Metals also has exploration projects in the Bushveld Igneous Complex of South Africa.
Strategically, the combination of the PGM assets of Sylvania and GAU would provide an opportunity to create long term benefits and value for the shareholders of both companies through synergies and enhanced efficiency. Further, the acquisition of SA Metals would strengthen the combined entity's interest in PGM projects in South Africa.
Total consideration payable by Sylvania under the increased offer, assuming 100% acceptance, would be approximately 8,873,854 Sylvania shares, equivalent to a value of approximately A$8.8 million based on the closing price of Sylvania shares on ASX on 11 May 2009.
Sylvania is in the process of preparing a formal Bidder's Statement and will lodge that document with the ASX and ASIC in due course.