EganStreet Resources Ltd’s (ASX:EGA) substantial shareholder Silver Lake Resources Limited (ASX:SLR) has extended its off-market takeover bid for all of EGA’s fully paid ordinary shares to 7pm Sydney time on December 13, 2019.
As of September 17, Silver Lake held a 30.43% interest in EganStreet with 42,490,254 shares.
In late July, the Board of EganStreet unanimously recommended that the offer, which implies a $522 million total transaction enterprise value, be accepted.
Valued at 40 cents per share
Each EganStreet shareholder will receive 0.27 Silver Lake shares for every EganStreet share held.
This offer values EganStreet at 40 cents per share which represents a premium of 28.9% to the close price of 31 cents, which was the price of shares on ASX at the close of trading on July 29, 2019.
It also represents a premium of 24.2% to the 5-day volume-weighted average price (VWAP) of 32.2 cents up to and including July 29 and 43.4% to the 30-day VWAP of 27.9 cents up to and including July 29.
EganStreet last traded at 30 cents and Silver Lake at $1.03.
Silver Lake has highlighted the benefits of its all scrip offer for EganStreet shareholders:
- The offer provides EganStreet shareholders with a significant reduction in funding and project execution risks, in the current environment in which access to capital for junior developers is difficult;
- By accepting the scrip offer, EganStreet shareholders will benefit by maintaining a level of exposure and share price upside that may be generated through the integration of the Rothsay project into a company with established proximal infrastructure and demonstrated exploration success in growing the mineral resource base of narrow, high-grade gold deposits;
- More broadly, the scrip offer provides the opportunity for EganStreet shareholders to become part of a financially stronger company with a stable platform of established Western Australian operations and a high-quality team with a proven focus on cashflow generation in an environment with a constructive outlook for gold prices;
- EganStreet’s largest shareholder Lion Selection has accepted the offer; and
- Should the Offer be declared free of all defeating conditions (unconditional), Silver Lake will pay the offer consideration within seven days of the offer being declared unconditional.