Shareholders remain unconvinced of Intrepid/AIC merger

20th February 2019 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – The share price of ASX-listed Intrepid Mines fell by more than 6% on Wednesday after the company resurrected a merger agreement with fellow-listed AIC Resources.

Intrepid’s initial off-market takeover bid for AIC fell flat earlier this year, after the company’s offer of one Intrepid share for every 3 AIC Resources shares failed to gain the necessary traction with shareholders.

Intrepid said on Wednesday that the companies have re-engaged, having recognised the merits of combining the companies, and have agreed to revised terms.

The new off-market takeover offer would see Intrepid offer one of its own shares for every three AIC shares held, with the combined entity including a combination of AIC and Intrepid directors.

On the successful completion of the transaction Intrepid shareholders would hold a 27% share in the combined entity, with AIC shareholders holding the majority 73% interest.

The two companies have argued that the merger would provide a number of benefits for both parties, including the delivery of a large contiguous land-holding which is highly prospective for both gold and copper, as well as a strong balance sheet which could potentially provide a springboard for future growth.

The individual boards have unanimously recommended that shareholders accept the offer.

As the merger would involve the issue of more than 100% of Intrepid’s issued capital, it has been classified as a ‘reverse takeover’, and would require Intrepid shareholder approval.

The transaction would also be subject to a number of other conditions, including a 90% acceptance of AIC shares.

Intrepid shares were trading at a low of 34c a share on Wednesday, down from an opening price of 36.5c a share, while AIC shares fell from an opening price of 17c a share to 16c a share.