Silvercorp Metals Inc. – Update on the OreCorp Acquisition
Silvercorp Metals Inc. (TSX: SVM | NYSE-A: SVM) in an update to its planned acquisition of OreCorp Limited (ASX:ORR), intends to lodge a third supplementary bidder statement with the Australian Securities and Investments Commission to indicate that the Company will not waive its 50.1% minimum acceptance condition.
What does this mean?
If Silvercorp is unable to secure 50.1% of OreCorp, it will either rescind all contracts from the acceptances of the offer, so that the OreCorp shareholders will continue to maintain their interest in OreCorp, or extend its offer.
How does this affect me if I have accepted Silvercorp’s offer?
If Silvercorp can buy more than 50.1% of OreCorp, your shares will be sold to Silvercorp and you will receive a cash payment and shares in Silvercorp in line with the terms of Silvercorp’s offer.
If Silvercorp is not able to buy more than 50.1% of OreCorp, you will retain your shares in OreCorp.
If Silvercorp extends the offer period, you can continue to wait for the deal to close or withdraw your acceptance and retain your OreCorp shares.
Is this positive news?
Yes, this will ensure that investors in OreCorp, who opted to accept Silvercorp's offer are protected so they will not end up being shareholders of a business that has a minority interest in OreCorp.
It will give investors confidence that Silvercorp cannot buy the shares in OreCorp from the investors and then use them to accept an offer from a competing bidder.
When does the Silvercorp offer expire?
At 7 pm (Sydney Time) on the 22 March 2024, unless extended.
How does Silvercorp’s offer Compare to the other bidders?
Silvercorp’s cash and shares offer is currently valued at A$0.62, a 12% premium to Perseus Mining Limited ’s (ASX/TSX: PRU) cash offer of A$0.55 per share.
Perseus Mining also does not appear to have received approval from the Fair Competition Commission (FCC) of Tanzania for the acquisition of OreCorp, which Silvercorp has already received, so Perseus’ offer has a higher execution risk.
Perseus has confirmed that it will not exercise any rights it has in respect of the timing of the FCC’s Offer Approval, if approval is not provided before 19 March 2024.
The directors of Orecorp continue to unanimously recommend that shareholders reject the Perseus Offer and accept the Silvercorp offer.
What should I do, if I have not accepted Silvercorp’s offer?
Silvercorp is encouraging all OreCorp shareholders who have not already accepted Silvercorp’s offer to do so without delay, time is running out.
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This newsletter has been published by Mining and Metals Research Corporation (“the Company”). The information used to compile the article has been collected from publicly available sources and the Company cannot guarantee the 100% accuracy of those sources. This communication is intended for information purposes only and does not constitute an offer, recommendation, solicitation, to make any investments.? Nothing in this communication constitutes investment, legal accounting or tax advice, a personal recommendation for any specific investor. The Company do not accept liability for loss arising from the use of this communication. This communication is not directed to any person in any jurisdiction where, by reason of that person's nationality, residence or otherwise, such communications are prohibited.? The Company may derive fees from the production of this newsletter.