PERTH (miningweekly.com) – ASX- and TSX-listed Troy Resources has launched a takeover offer for fellow-listed Azimuth Resources in a share exchange that valued Azimuth at A$188-million.
Under the proposal, Troy was offering one of its own shares for every 5.695 Azimuth shares held, implying a value of A$0.437 a share for Azimuth.
The offer represented a 78% premium to the closing price of Azimuth shares on March 27, and a 62% premium to the three-month volume-weighted average price.
Azimuth’s board and CEO have unanimously recommended that shareholders accept the offer, in the absence of a superior proposal.
“After careful consideration, and having consulted our major shareholder, the board of Azimuth is pleased to recommend this transaction to shareholders,” chairperson Michael Hunt said on Thursday.
“By accepting this offer, Azimuth shareholders will gain all the benefits of being part of a profitable multimine producer, while retaining significant exposure to the upside that our assets offer.”
Hunt added that the Azimuth board strongly believed that Troy was the ideal party to continue development of the West Omai project, as it moved into its next stage of development.
“For these reasons, we are unanimously of the view that the deal makes sense for all our shareholders and we are excited by the potential of the combined business.”
The takeover would create a South America-focused gold producer with a measured and indicated gold resource of some 760 000 oz, and an inferred resource of 1.92-million ounces, with reserves of 640 000 oz.
The combined entity would have a number of production and development assets providing growth opportunities, as well as significant exploration potential.
At the close of the transaction, Azimuth shareholders would hold a 45% interest in the combined group.
“We are delighted to have secured the support of the Azimuth board,” said Troy chairperson David Dix.
“This is one of those relatively rare situations in resources mergers and acquisitions where a takeover can generate material value for both sets of shareholders.”
Dix noted that Troy had the technical team, balance sheet, and the South American project development experience to quickly and cost-effectively bring the West Omai project into production.
“In addition to the upside at our flagship Casposo project, we can see substantial exploration upside in Azimuth’s ground position. We are very excited about the opportunity to implement this deal and get on with project development.”
The offer was subject to a 90% acceptance condition.