Despite a rocky start, Silvercorp Metals is likely to complete its acquisition of OreCorp in an off-market takeover offer.
The companies have agreed to terminate the previous scheme implementation deed that commenced in August, and enter into a bid implementation deed.
The new agreement will see Silvercorp acquire all of the OreCorp shares it doesn’t currently own, with OreCorp shareholders to receive 0.0967 a Silvercorp share for each OreCorp share held, and $0.19 per share cash, four cents higher per share than the previous offer.
OreCorp said the offer aims to create a geographically diverse mid-tier precious metals company with a robust growth pipeline.
“We are delighted to have reached this position with Silvercorp,” OreCorp chief executive officer and managing director Henk Diederichs said.
“It became clear in recent weeks that the proposed scheme was at risk of not proceeding to completion.
“We believe this would have prevented OreCorp shareholders having the opportunity to receive a significant premium on their OreCorp shares and exposure to a company that is geographically diverse, with a strong balance sheet and solid mine building and operational experience.
“This new Silvercorp offer provides shareholders with a level of certainty and the board believes this is an excellent outcome.”
In early November 2023, the Tanzanian Fair Competition Commission (FCC) granted Silvercorp unconditional merger approval for the acquisition of OreCorp under the previously proposed scheme of arrangement.
Since the new agreement between the companies, the FCC has indicated that it will need the opportunity to consider the change of circumstances between the scheme of arrangement and the offer and a new merger approval may be required.
OreCorp and Silvercorp have lodged the relevant documentation seeking the required approval from the FCC, but if approval is not granted the offer will not be able to be completed.
But both companies are confident in the likelihood of their success.
“The parties have been through the FCC approval process during the scheme of arrangement and have a positive working relationship with the FCC, as well as relevant government authorities,” OreCorp said.
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