St Barbara will proceed with selling its Leonora assets to Genesis Minerals after turning down a bid from Silver Lake Resources.
Silver Lake’s offer was higher than the Genesis proposal, with $132 million more in Silver Lake’s package of cash and equity, but the Genesis offer has grown in value from $600 million to an estimated $641 million due to an improved Genesis share price.
Silver Lake’s offer comprised total consideration of $732 million, including $326 million in cash and $327.1 million Silver Lake ordinary shares. The proposal did not include any contingent consideration.
St Barbara’s transaction agreement with Genesis includes reciprocal exclusivity arrangements, including ‘no shop’, ‘no talk’ and ‘no due diligence’ restrictions and notification obligations. The exclusivity arrangements are subject to customary ‘fiduciary out’ exceptions in respect of the ‘no talk’ and ‘no due diligence’ obligations.
St Barbara has rejected Silver Lake’s offer based on its board concluding that the terms offered by Silver Lake do not constitute a superior proposal to the Genesis transaction, and it does not satisfy the ‘fiduciary out’ exceptions to the ‘no talk’ and ‘no due diligence’ obligations under the transaction agreement.
“St Barbara will not be further engaging with Silver Lake in respect of the non-binding, indicative and conditional proposal,” the company said.
St Barbara said the transaction agreement with Genesis remains in full force and effect and the parties are proceeding in accordance with the contemplated schedule. The St Barbara board has not changed its unanimous recommendation in support of selling the Leonora assets to Genesis.
Silver Lake is a mid-tier ASX-listed gold producer with producing assets in WA and Canada. The company produced 63,153 ounces of gold from its Deflector, Mount Monger and Sugar Zone operations during the March quarter.