Gold, News, Takeover bids

St Barbara rejects Silver Lake offer

Silver Lake Resources was unsuccessful in engaging with St Barbara about an alternative indicative proposal to acquire the Leonora assets in Western Australia.

The offer Silver Lake put forward was considerably higher than the offer placed by Genesis Minerals.

Genesis’ offer included total consideration of $600 million, comprising of $370 million upfront cash, $170 million Genesis scrip and $60 million Genesis scrip contingent upon the Tower Hill project reaching first production.

St Barbara said Genesis’ consideration under the transaction agreement now has an implied value of $641 million based on the closing price of Genesis shares on May 3, which were worth $1.355 per share.

To contrast, the offer Silver Lake put forward included consideration of $732 million, comprising of $326 million in cash and $327.1 million Silver Lake ordinary shares. The proposal did not include any contingent consideration.

St Barbara’s transaction agreement with Genesis includes reciprocal exclusivity arrangements, which included ‘no shop’, ‘no talk’ and ‘no due diligence’ restrictions and notification obligations. The exclusivity arrangements are subject to customary ‘fiduciary out’ exceptions in respect of the ‘no talk’ and ‘no due diligence’ obligations.

St Barbara has rejected Silver Lake’s offer based on its board concluding that the terms offered by Silver Lake do not constitute a superior proposal to the Genesis transaction, and it does not satisfy the ‘fiduciary out’ exceptions to the ‘no talk’ and ‘no due diligence’ obligations under the transaction agreement.

“St Barbara will not be further engaging with Silver Lake in respect of the non-binding, indicative and conditional proposal,” the company said.

St Barbara said the transaction agreement with Genesis remains in full force and effect and the parties are proceeding in accordance with the contemplated schedule, and its board has not changed its unanimous recommendation in support of the sale of Leonora to Genesis.

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