Intrepid Mines Ltd (ASX:IAU) has entered into a takeover implementation deed with AIC Resources Ltd (ASX:A1C) for an off-market takeover offer to be made by Intrepid for all issued AIC ordinary shares.
Under the takeover bid, Intrepid is offering 1 Intrepid share for every 3 AIC shares held.
The merger is classified as a reverse takeover, according to the ASX Listing Rules, and is subject to approval by Intrepid’s shareholders.
Intrepid also intends to undertake a partial return of capital to its existing shareholders of up 75 cents per share.
The board and management team will comprise of AIC’s Brett Montgomery as chief executive officer and Josef El-Raghy as chairman, and existing directors of Intrepid Richard Baumfield and Tony Wolfe staying on as non-executive directors.
‘Dominant contiguous land position’
AIC chairman Josef El-Raghy said: “This is a compelling offer for AIC shareholders as this transaction will provide an even stronger platform to continue AIC’s exploration efforts.
“The combined entity will hold a dominant contiguous land position in the underexplored Plutonic and Marymia region.”
Asides from a strong cash balance, the merged company will hold around 3,200 kilometres of tenure in WA that is highly prospective for gold and base metals.
It will also reduce general and administration costs by more than $500,000 a year.
The new entity’s board and management team will comprise of AIC’s Brett Montgomery as chief executive officer and Josef El-Raghy as chairman, with existing directors of Intrepid Richard Baumfield and Tony Wolfe staying on as non-executive directors.
Compelling value proposition for both companies
Intrepid chairman Richard Baumfield said: “The combination of AIC and Intrepid represents a compelling value proposition for shareholders of both companies.
“The combined company will be in a strong position with strong management, quality assets and a significant cash balance which will allow for the ongoing exploration activities in the Marymia area.”
The bidder and target statements are expected to be lodged next week and will kick off the offer period.
Intrepid has scheduled a general meeting for November 9 to seek shareholder approval for the takeover.
The implementation deed is subject to several conditions including:
Receipt of acceptances in respect of at least 90% of AIC’s shares;
Intrepid shareholder approval;
Approval for Intrepid’s acquisition of AIC shares held by Brahman Pure Alpha Pte Ltd;
The successful completion of Intrepid Mines Zambia Ltd’s Kitumba and Mumbwa copper projects; and
Confirmation from the ATO of Intrepid’s 75 cent return of capital.