Furthermore, Silver Lake will increase the consideration to 0.431 for each EganStreet share held, if it obtains at least 38% of shares on or before 7pm Sydney time on November 8, 2019, being seven days from lodging the variation notice.
SLR holds 31.6%
As at October 31, 2019, Silver Lake had a relevant interest in 31.6% of shares, including acceptances from the Board of Directors and EganStreet’s largest shareholder Lion Selection Group Ltd (ASX:LSX).
EganStreet’s managing director Marc Ducler said: “We are pleased to have reached an improved agreement with Silver Lake which, we believe offers shareholders the best possible chance to realise the full value of the work we have completed in advancing the Rothsay project to its current position.”
Upon reaching 38% Silver Lake intends to declare the offer immediately unconditional.
Payment of the consideration will be made within seven days of receipt of valid acceptances or within seven days of the offer being declared unconditional for those that have already accepted the offer at that time.
EganStreet’s Board of Directors continue to unanimously recommend the offer, in the absence of a superior proposal and further recommends that shareholders accept the offer in a timely manner to allow all shareholders to receive the value uplift from the conditional offer consideration.
The new offer consideration represents an increase in value relative to the 0.27 Silver Lake shares for each EganStreet share contemplated in the Bidder’s statement dated August 14, 2019.
Ducler said, “We recommend all shareholders who have not yet accepted the offer to accept the offer as soon as possible to allow all shareholders to be eligible to receive the uplift from the conditional offer consideration, in the absence of a superior proposal.”
Values EGA at 46.1 cents
The new offer consideration values EganStreet at 46.1 cents per share, which implies a $63 million total transaction enterprise value, relative to the $52 million total transaction enterprise value implied at the launch of the original offer.
Should shareholders become entitled to the conditional offer consideration, this values EganStreet at 50 cents per share which implies a $68 million transaction enterprise value.
In a statement EGA said: “By accepting the improved 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 consideration 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 cash flow generation, in an environment with a positive outlook for gold prices.”
Silver Lake’s managing director Luke Tonkin said, “The revised offer ratio continues to preserve EganStreet’s and Silver Lake’s objectives by ensuring both EganStreet and Silver Lake shareholders participate appropriately in the demonstrable benefits derived from this transaction whilst providing shareholders with the opportunity to participate in the potential rerating the combination of both EganStreet and Silver Lake assets provides.”
In the statement issued on Friday, EGA said: “EganStreet notes the announcement made today contemporaneous with this announcement in relation to media speculation about a non-binding, indicative and incomplete proposal received from Adaman Resources Pty Ltd.
“Given the new offer consideration, the EganStreet board will immediately, in accordance with its obligations under the BID, advise Adaman that it will cease discussions with them and request the return of any confidential information provided.”