Emerald Resources is proposing to merge with Renaissance Minerals via an off-market takeover offer under which it will acquire all of the shares in Renaissance that it does not already own by offering 1.55 new Emerald shares for every Renaissance share.
According to the joint announcement by the two companies, the offer is recommended by all independent directors of Renaissance, in the absence of a superior proposal.
The merged entity will create a well-funded, mid-tier gold development company which is well placed to develop its assets and pursue any value enhancing opportunities which may arise.
Subject to completion, the merged entity will have a pro-form market capitalisation of approximately A$95 million and approximately A$20 million in cash.
The offer values Renaissance at approximately A$40 million, or 7 cents per share and provides a 27% premium to the Renaissance 30-day volume weighted average price (VWAP).
Emerald has obtained pre-bid acceptance acceptances agreements from Renaissance shareholder representing in aggregate 9.4% of renaissance shares, giving it a relevant interest of 19.4% when combined with Emerald’s existing 10% shareholding in Renaissance.
Renaissance has received statements from certain shareholders intending to accept the offer, in the absence of a superior proposal, representing in aggregate 15% of Renaissance share.
The merged entity will have a strong board and management team that can deliver the proposed strategy and growth going forward.
Emerald Chairman Simon Lee will remain as Chairman of the Board of the combined group, while Renaissance Managing Director Justin Tremain will be offered a position as Executive Director on the Board.
Mr Lee said Mr Tremain’s appointment will retain long-term knowledge of the flagship Cambodian Gold Project and allow for a focus on corporate promotion, business development and project financing.
“We are aligned with the Renaissance Board’s assessment of the strong potential of this advanced development gold project with an excellent exploration upside,” Mr Lee said.
“The merger formalises this position and simplifies the process of enhancing the value of this project for the benefit of all shareholders. I look forward to Justin’s contribution to our highly experienced Board and management team to achieve this objective.”
Renaissance Chairman Hamish Halliday said the merger represents a natural progression for both companies following the successful joint venture of the Cambodian Gold Project.
“A successful merger will create an emerging gold producer with a highly credentialed management team, a strong balance sheet and a company very well positioned to deliver growth for all shareholders,” he said.