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UK-incorporated gold exploration, production, and development company Allied Gold Mining plc (LSE:ALD) topped the trading board on the London Stock Exchange today following an offer to acquire the company that nearly doubled its market value.
St. Barbara Limited (ASX:SBM), also a gold producer and explorer listed on the Australian Securities Exchange (ASX), offered to acquire Allied Gold for £360 million, or about £173 million more than Allied Gold’s market capitalisation as at 28th June 2012, representing a 92.3% premium for the FTSE Small Cap company.
“St. Barbara and Allied Gold believe that the combination has a clear strategic and financial rationale, is value enhancing, and provides benefits for the shareholders of the enlarged group,” statement released to the public declared.
Complimentary Business
According to Allied Gold, which is also listed on the ASX and the Toronto Stock Exchange, the combination of both companies will create a complimentary business with the “largest gold reserves and resources portfolio of any mid-tier ASX listed peer company” at about 11.4 million ounces of measured and indicated gold combined, with estimated inferred resource of approximately 5.6 million ounces of gold.
Allied Gold operates two gold mines in Papua New Guinea and holds exploration licences in the Solomon Islands; while St. Barbara’s key assets are located in Western Australia.
St. Barbara has received irrevocable undertakings totalling 20.1% of all the issued shares of Allied Gold, including those of the Allied Gold Directors’, who intend to unanimously support the sale set to be completed in the third quarter of 2012.
Under the terms of the sale, which will be initiated through a Court-sanctioned scheme of arrangement, the scheme shareholders will receive Au$1.025 in cash, payable in either Australian Dollars or Pound Sterling, and 0.8 St. Barbara share for each Allied Gold share.
Comments from Both Parties
Tim Lehany, Managing Director and Chief Executive Officer of St. Barbara said the clear “strategic and financial logic” of the combination will “deliver a more diversified asset portfolio spanning exploration to gold production”.
Mr. Lehany said they “look forward to working with the Allied Gold team to leverage complementary skills across every part of the value chain from exploration to gold production.”
Allied Gold’s Founder and Chairman Mark Caruso, commenting on the proposed merger stated:
“The Board of Directors of Allied Gold unanimously supports the transaction and believes it to be a unique transformational opportunity with the potential to realise an immediate premium for shareholders… The investment attraction of the merged group is compelling, being one of the largest production and resource/reserve based mid-tier ASX listed gold companies.”
Shares of Allied Gold traded at £1.48 per share at 1:00 PM GMT, 60.9% higher than yesterday’s close equivalent to 55.75 pence.
Company Spotlight
Allied Gold Mining plc is a gold exploration, production, development company with assets in Papua New Guinea and Solomon Islands.
Shares of this publicly listed company are traded on the main market of the London Stock Exchange, Australian Securities Exhange, and the Toronto Stock Exchange under the ticker “ALD”.
