Newcrest Mining has come out a winner in a $350 million takeover target by a new company comprising of Catalpa Resources and Conquest Mining.
The merger between Conquest and Catalpa was reportedly orchestrated by Newcrest, which will become the biggest shareholder in the company.
St Barbara Mining was in talks to be involved in the merger, but this morning released a statement acknowledging the Conquest Catalpa merger.
Catalpa previously described St Barbara’s scrip and cash offer as opportunistic.
Once the merger and asset sale are completed a $150 million rights issue will be part of the plan.
The move will create a $1.18 billion miner with five gold projects in Queensland and Western Australia.
Catalpa and Conquest announced the “merger of equals” yesterday, with Catalpa set to pay Conquest 0.3 shares for each Conquest share.
Prior to the deal being announced yesterday, Catalpa and Conquest would have been worth $640 yesterday, based on share prices, according to The Australian.
On top of the list for the merged company would be acquiring Newcrest’s Mount Rawdon mine and its 70 per cent stake in the Cracow mine, of which Catalpa owns 30 per cent.
The acquisition will depend on Catalpa’s shareholders approving the deal through a scheme of arrangement.
Newcrest will then obtain a 38 per cent stake in the merged company and values the mine stakes at $390 million, which will then drop to 33 per cent after equity rising.
Newcrest has agreed not to participate in the rising.
Currently, the closest shareholder is South African company Gold Fields, which will have a 3 per cent stale via its holding of 9 per cent in Conquest.
The board will be made up of three members each from Conquest and Catalpa and two from Newcrest.
Conquest chairman Jake Klein will serve as executive chairman of the merged company and Catalpa’s chief executive will be managing director.
Chairman of Catalpa, Peter Maloney said in a statement the company is pleased with its decision on the merger.
“I believe that this transaction will deliver an outstanding outcome for all parties,” he said.
“Combining these assets will create a leading Australian gold company with a strong suite of production and development assets with significant exploration upside, a dynamic management team and a supportive major shareholder.”
Conquest chief executive Jake Klein agreed, saying he is “really excited by the people, the assets ant the opportunities that we a bringing together in this deal.”
In a separate statement, Newcrest’s Greg Robinson said the deal would be beneficial for shareholders.
Image: Mount Rawdon mine