Canada’s Dundee Precious Metals will acquire UK-based Adriatic Metals in a cash-and-stock deal valued at $1.25 billion, the companies said on Friday, marking the latest in a string of foreign takeovers of UK firms.
Shares of Adriatic Metals were up 1.2% at 244 pence after the announcement of the deal.
The proposed transaction comes amid a growing wave of acquisitions targeting UK-based firms, capping a busy week for dealmaking in the UK.
Toronto-listed Dundee is offering 268 pence per Adriatic share, consisting of 93 pence in cash and 0.1590 new Dundee shares for each Adriatic share.
The offer represents a 50.5% premium to Adriatic’s closing price of 177.8 pence on May 19, the last trading day before it confirmed takeover talks with Dundee.
The acquisition will give the Canadian miner full ownership of Adriatic’s Vares silver project in Bosnia and Herzegovina, broadening its portfolio of mining assets.
Dundee, which has operations in Bulgaria and Namibia, said the combined group would benefit from a strong production profile, mineral reserves, and a diversified metal mix.
“The Vares is a logical fit with our portfolio, and adds near-term production growth and mine life, a highly prospective land package, and cash flow diversification,” Dundee CEO David Rae said in a statement.
After completion, existing Dundee shareholders will hold approximately 75.3% of the combined entity, while former Adriatic shareholders will own around 24.7%.
Dundee said it has secured irrevocable commitments from Adriatic directors and major shareholders, representing 37.2% of Adriatic’s shares, to vote in favor of the deal.
Adriatic’s CEO Laura Tyler and CFO Michael Horner will step down following the completion of the deal, with all Adriatic directors set to leave the board, Dundee said in a statement.
The combined group’s global headquarters will remain in Toronto, and Adriatic’s UK office will be closed.
Source: Reuters.com